Renting is more expensive than buying!!!

The National Association of Realtors recently reported that the "real reason" why home sales don't crash for too long is simply, rents. Basically, when purchase demands slow down, rentals speed up. So, rents provide the floor that stops housing prices from any major declines.

All of the national media outlets have been reporting on the fall of home prices across the nation. It has been on CNN, CBS, FoxNews, just to name a few. However, they fail to report that rental prices have actually gone up dramatically across the nation. In fact, the 1st quarter of 2008 marks the 24th consecutive quarter that rental prices have increased nationwide.

The softer home markets and the tougher lending restrictions have forced many would-be homeowners into becoming renters. This is not necessarily a good thing for the family budget as many renters are spending more than half of their income on housing, while not gaining any equity or wealth.

To compound this issue, about 40% of all potential home buyers are first time homebuyers, so eliminating them from the homebuying equation, you have successfully limited the pool of buyers for homes that are currently on the market. Add to the mix that most of the first time homebuyers purchase homes from previous first timers, who are looking to move up to a larger, more expensive home, and now you are creating a cavernous hole of unsold homes due to a lack of buyers.

A bright spot is that most mortgage lenders have found an increase in the number of loan applications, despite a slight rise in the interest rates from 5.75% to 5.78%. Another bright spot is the typical buying season is the spring and activity is bound to start up again.

In closing, if you wish to pay more for rent, then continue to rent. If you are interested in buying a home, email me and I will get to work on getting you into your new home.