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Gap Narrows Between Mortgage Payments, Rents
Housing slump prompts shift
By Matt Cantor
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Posted Feb 25, 09 8:22 AM CST
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(Newser)
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During the housing boom, mortgage payments held steady, consistently topping rent levels; now, with the market cratering, they’re returning to historical levels, the Wall Street Journal reports. After-tax mortgage payments averaged about 26% more than rent over the past 18 years; during the boom that figure surged to 66%. By the end of last year, it fell to 24%.That makes owning look more attractive than renting for the first time in years—provided you can get a mortgage.
For people on the market, “it's not a 'no-brainer' anymore if they're going to rent versus own,” said an expert. But don’t expect a rush to buy, he notes. “People are still worried about falling prices,” says another analyst, and tighter lending standards will also likely discourage some purchases. “The nonqualified renters are not moving out this time,” says another expert.