With mortgage rates above 7%, interest in rentals is rising among many would-be buyers.
A Zillow measure of rental demand has risen 19% from a year earlier as high home prices and elevated mortgage rates sideline prospective buyers. Both rents and typical monthly home payments are on the rise, but the cost of a mortgage and related monthly expenses have been rising much faster.
The median apartment in the US rents for $1,932, a 2.7% jump from a year earlier. But in the same period, the typical housing payment for a new homebuyer has risen 5% to $3,037.
With renting meaningfully cheaper than owning a home, many renters are feeling discouraged about their odds of ever becoming homeowners. As of this year, renters surveyed by the Federal Reserve Bank of New York put their average odds of attaining homeownership at just under 35%, down from 56% a decade ago.
Many would still prefer to own, however. The share of consumers who say they would prefer to own a home if they had the <a href="https://bitcomme.com/are-stronger-earnings-altering-the-investment-case-for-cvb-financial-stock-2/” title=”Are Stronger Earnings Altering The Investment Case For CVB Financial Stock?”>financial means has hovered between 65% and 74% for the last decade. Today, mortgage rates remain a top financial hurdle for many renters. Earlier this year, when mortgage rates were around 6.2% — lower than current levels — nearly 44% of renters said getting a mortgage would be “very difficult.”
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
