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The housing market is facing a significant shift as mortgage rates continue to rise, hovering above 7% for the second consecutive week. This uptick in rates is undoubtedly a challenge for potential home buyers looking to enter the market during the spring selling season.
With sticky inflation driving mortgage rates higher, you may be wondering whether it’s better to rent an apartment or buy a house right now.
According to data from Realtor.com, the monthly median rent in February was around $1,700, a $4 decrease from January.
The most significant price cuts were seen in the studio apartment market, with a median price tag of approximately $1,400 per month.
Prices for two-bedroom and one-bedroom apartments also fell, providing some relief for renters.
On the other hand, the homebuying landscape presents a different picture. Data from Redin shows that the median monthly payment on a home has hit a record, reaching around $2,800 per month – a staggering 133% increase from the same period last year.
This surge in monthly payments is largely attributed to the soaring mortgage rates, with the average 30-year fixed mortgage rate hovering above 7%, making homeownership increasingly out of reach for many.
Also, it has become clear that the Federal Reserve will maintain these higher interest rates for an extended period, dashing the hopes of a rate cut in the near future.
Given the current market conditions, you’ll need to carefully consider your financial situation and long-term goals to determine whether renting or buying a home is the better choice for you.
Factors such as your budget, job stability, and future plans should all be taken into account.
If you’re unsure about the best path forward, it’s advisable to consult with a financial advisor or real estate professional who can provide personalized guidance based on your unique circumstances.