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Rising Rents May Promote Homeownership, Buying Still Affordable
|Rising home prices may not seem ideal for those looking to purchase a home, however, improving housing market factors are indicative of a healthier industry.
Thrusday, November 8th, 2012
Higher home prices may have some prospective buyers hesitant to begin their property search, but as rents continue to rise, homeownership remains more affordable in many parts of the country.
New data from Trulia's Price Monitor reveals the asking prices for properties listed for sale in September were up 2.9 percent from the same month last year, while they rose 3.6 percent on a year-over-year basis when excluding distressed sales. Nationally, asking prices posted a 1.8 percent quarter-over-quarter gain when seasonally adjusted, and were up 0.7 percent on a month-over-month basis.
Metros that posted the largest year-over-year price increases include many areas that have also seen improving local economies. Home prices in Phoenix, Arizona were up 24.9 percent when compared to prices in October last year, while they also posted gains in California, Florida, Michigan, Colorado and Nevada.
Though higher home prices may be a turnoff for buyers, mortgage rates as reported by Freddie Mac have been lingering near historically low levels reached in the first week of October. Lower rates have helped offset rising home prices, allowing many Americans the opportunity to become homeowners.
Stricter lending standards may have prevented some potential buyers from making the investment, driving the demand for rental properties up. A higher demand for these types of homes has also driven rents up on a national levels. Those considering making the investment may be glad to hear standards are expected to become looser before 2013, allowing qualified borrowers a better opportunity at obtaining a mortgage loan.
The Trulia Rent Monitor shows rent gains continued to outpace home price increases in October, as they were up 5.1 percent on a year-over-year basis. MSAs typically have higher rental prices when compared to smaller cities and towns, however, some metros including Houston, Texas, Miami, Florida and Oakland, California posted year-over-year rent increases of 10 percent or higher.
National real estate trends have a major impact on the real estate market on a daily basis. Keeping up-to-date on the latest news and notes posted by GL Homes can make sure those looking for South Florida homes know exactly how the current market will affect them.