Wall Street Journal writer Laura Kusisto reported earlier this month that, “More than three-quarters of Americans now view renting as more affordable than owning a home, the latest sign that rising mortgage rates and higher home prices will continue to pressure home sales.
“Some 78% of people now say that renting is more affordable than owning, according to survey data to be released Tuesday by mortgage company Freddie Mac. That is up 11 percentage points from only six months ago.
“The survey also indicates that demand for for-sale housing could remain soft in the coming months. Some 58% of renters now say they don’t currently have plans to buy a home—up from 54% in February, according to Freddie.”
The Journal article pointed out that, “Demand for rentals swelled after the recession, as millions of families lost their homes to foreclosure and tight credit made it difficult for young people to buy homes. Rents rose by double-digit percentages in many cities and the share of families who couldn’t afford their rent swelled to record highs.
“Meanwhile home prices plummeted and, for those who could qualify for mortgages, it was a great time to buy.
“But this year, that dynamic has reversed. Rent growth has slowed in line with inflation in the last few quarters, as new rental supply hits a three-decade high. At the same time, home prices continue to grow significantly faster than incomes and inflation and mortgage rates have risen nearly a percentage point from the beginning of this year. That has made it significantly more expensive to buy a home.”
