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Renters Paying Substantially More While Owning Costs Less

Renters Paying Substantially More While Owning Costs Less | Simplifying The Market

In a recent Insights Blog, CoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.

“CoreLogic’s national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period.”

Renters Paying Substantially More While Owning Costs Less | Simplifying The Market

Why the difference between the costs of renting versus owning?

It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogic explained:

“It’s mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.

The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018.”

Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.

According to the Economists’ Outlook Blog, NAR’s February 2019 Housing Affordability Index showed that the “percentage of income needed” to pay the typical mortgage has decreased the last three months.

  • November – 17.3%
  • December – 16.9%
  • January – 16.2%
  • February – 15.9%

Bottom Line

What does this all mean to the current housing market? We think First American said it best in a post last week:

“The mortgage rate-driven affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we’re in for a great spring home-buying season.”

Content previously posted on Keeping Current Matters

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Joseph Garcia

https://www.dfweliteliving.com

Joseph Garcia is a proud native Texan, born in Lubbock, raised in San Antonio and loving Dallas. Everyday Joseph uses his more than 16 years experience in the Real Estate industry to help better serve his clients. Joseph started his career in Property Management, Apartment Locating, and Leasing, then quickly transitioned into becoming a full-time residential agent in 2007. Today, Joseph continues to focus on Residential sales and with his broad knowledge base can even assist his clients with Commercial deals.

Joseph is dedicated to helping individuals and families find their dream home and more importantly, the lifestyle they desire! What clients love about Joseph the most is his passion for life and​ ​outgoing personality. When it comes to marketing and selling homes "JoJo Sells" uses the power of Social Media to move homes quickly.

​Joseph also prides himself in making sure each deal gets to the closing table​ no matter how difficult the deal is​. He also goes above and beyond to ensure his clients find the perfect home match whether it's personal or investment. Joseph's extensive network of Real Estate professionals in Sales, Leasing, Lending, Home Inspection, Home Repair and Title make every transaction as seamless as possible.

Joseph carries the distinguished Certified Luxury Home Marketing Specialist (CLHMS) Designation from the Institute for Luxury Home Marketing and a Global Elite Certification which provides access to a Global Real Estate Network.

Joseph completed the Metrotex Leadership Academy class of 24 and immediately after served as a ROC to mentor the Medical / Sports day of class 25. In 2015 he partnered with 5 other individuals to create and serve as the Marketing Chair for the Non-Profit Gay And Lesbian Organization of Real Estate (GALORE) to address unique Real Estate issues facing the Gay and Lesbian community. Joseph is also a member of the National Association of Hispanic Real Estate Professionals (NAHREP), as well as Young Professionals Network (YPN) & Metrotex Leadership Alumni.

He currently services as the Sales Director in the VIVO Uptown office and every day shares his vast Real Estate experience by coaching and mentoring new agents. When you're working with Joseph, you're working with not only a fun agent, but one of the best!

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