Renters Paying Substantially More While Owning Costs Less

Renters Paying Substantially More While Owning Costs Less


Renters Paying Substantially More While Owning Costs Less | MyKCM

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 | MyKCM

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.”


Brian Woodhead -Skyline Team Leader Headshot
Author:
Phone: 602-369-0671
Dated: April 25th 2019
Views: 108
About Brian Woodhead: Realtor Designation You deserve a Realtor with the Knowledge from these designations. Realtor’s...

Property Search









RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

If You Are A Buyer Is Offering Asking Price Enough - In today’s real estate market,
Remote Work Is Here To Stay Can Your Home Deliver The Space You Need - A lot has changed over the past
Is The Number Of Homes For Sale Finally Growing - An important metric in today’s
The Truth About Todays Buyer Demand - When it comes to the latest news&

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Skyline Team of Homesmart
13166 W McDowell RD. Suite B
Goodyear, AZ
602-483-4263
623-478-8230