Does history indicate the future and can we project past norms to discern future trends?
Lots of different ways to look at the both the residential sales price market and the price of rentals and their relationship to each other
The 1st graph shows the price differential between purchasing a home at the then current interest rate and price and renting an apartment in the Billings area
The 2nd graph shows the payment trend at the sales price and interest rate at each year
The 3rd graph shows average and median sales prices for each year
The 4th graph shows the rent trends each year
Using the average interest rate for the last five years (4.57%) at this average sales price this year so far a house payment would be $1435 as opposed to $1286 with current interest rate (3.57%) if you use the average rate for a 30 year mortgage since 1971 (8.64%) at current sales price a house payment would be $2188
So the thoughts to ponder for the next twelve months
#1 do interest rates stay at the level they are and the cost of purchasing grow at whatever price appreciation occurs in the market place and how would that event affect the rental market?
#2 do interest rates and home prices both go up and how would that event affect the rental market?
#3 do interest rates trend back towards the 40 year average home prices remain the same, how would that event affect the rental market?
#4 is there such a creature as a “normal” market?
Comments (1)Subscribe to CommentsComment