This week brought a little relief for people who want to purchase a home. Mortgage rates didn’t fall, but at least they didn’t go up.
As of Wednesday, the average rate on the 30-year fixed-rate mortgage was 6.93%, about the same as the week before. Despite rate stability, the Mortgage Bankers Association (MBA) reports there was no increase in loan applications.
“Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market,” said Joel Kan, MBA’s deputy chief economist. “Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6% by the end of the year.”
Maybe one reason consumers aren’t rushing to buy homes is that renting is beginning to look like a better option. A new report from Realtor.com says it’s now cheaper to rent than buy a home in all of the top 50 U.S. housing markets.
Austin is a prime example. After home prices escalated during the pandemic, prices have dropped dramatically but remain well above pre-pandemic levels. While it’s costly to buy in Austin, renting is much more affordable.
According to Realtor.com, the median monthly rent payment in February was $1,530. The
monthly mortgage payment, including property taxes, insurance, and HOA dues, was $3,695. Buying a starter home costs 141.5% more than renting one.
Size matters
Realtor.com data show rentals fell in February for the seventh month in a row on an annual basis., The median cost of rent dropped annually by 0.4%, or $7, to a median of $1,708 a month in February, according to the report. Rents were $4 lower than in January.
The biggest price cuts in the rental market were for the smallest units. Rents for studios fell 1.5% year over year in February, to a median of $1,426 a month.
Prices ticked down 0.8% for two-bedroom units, to $1,889 a month, and dipped 0.4% for one-bedroom units. The median monthly cost of a one-bedroom unit was $1,587.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-03-29 11:53:53
