In a recent Insights Blog, CoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.
“CoreLogic’s national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period.”
Why the difference between the costs of renting versus owning in Lewisville-Clemmons?
It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogic explained:
“It’s mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.
The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018.”
Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.
According to the Economists’ Outlook Blog, NAR’s February 2019 Housing Affordability Index showed that the “percentage of income needed” to pay the typical mortgage has decreased the last three months.
- November – 17.3%
- December – 16.9%
- January – 16.2%
- February – 15.9%
What Does Housing Affordability Mean for Lewisville-Clemmons Renters & Home Buyers?
What does this all mean for renters/potential home buyers in this current housing market? Check out what First American said in a post last week:
“The mortgage rate-driven housing affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we’re in for a great spring home-buying season.”
How Much is Renting a House vs Buying a House in Lewisville-Clemmons Area?
Currently, in Lewisville-Clemmons, the median home sales price is about $217,000 while the median rental home is $1,487 per month. The mortgage payment on a $217,000 is about $1,070 at 4.3% principle and interest only not including taxes and insurance. The estimated escrow (taxes and insurance) added to your payment would be about $350 per month. This means it is basically cheaper to buy than rent in the median price range.
Wondering If You Should Rent or Buy a Lewisville-Clemmons Home?
Information like this is great and there's no lack of data these days. But how does it apply to you? We're here to analyze and help you interpret the data for your specific instance. There's no cookie cutter answer, because everyone's situation is different. If you have questions whether you can afford to buy a Lewisville-Clemmons home right now or not, don't hesitate to call/text us today at 336.701.2891. We're here to help!
-Tony & Kim Green - GREEN TEAM REALTORS