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Fewer Americans are in the home-buying mood. Rising interest rates and housing prices prices, coupled with slowing rent growth are making homeownership less attractive.
New data from Freddie Mac found 78 percent of Americans now consider renting to be more affordable than buying a home, up sharply from 67 percent six months ago, according to the Wall Street Journal. And the long-term outlook shows 58 percent of renters say they have no plans to buy a home, up from 54 percent over the same period.
That means demand for homes on the market could remain soft in the coming months. Home sales across the U.S. are slowing because of low inventory and high prices, according to recent reports.
Among the usual suspects: Mortgage rates are are up to nearly 5 percent, the highest they’ve been in seven years. The new rate is one percentage point higher than the beginning of the year. Rates are being pushed up by recent hikes in the Federal Reserve’s benchmark interest rate.
But it doesn’t mean renting is necessarily affordable.
Freddie Mac’s survey found that two-third of renters say they have had trouble paying their monthly bill in the last two years. Almost 9 out of 10 renters with occupations in what Freddie Mac considers “essential” fields — including healthcare and education — say they have had trouble cutting their landlords checks. [Wall Street Journal] — Dennis Lynch
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