When mortgage rates are low, people often think of buying. However, in neighborhoods with strong housing sales, prices are higher. Average mortgage interest rates are now 3.7 percent.
Experts say it is a good idea to rent in those communities.
Homeownership is still declining. A weak economy is to blame. The result is that more homes are available for renting. The number of rentable single-family houses grew by two million units from 2006 to 2010. One-third of all rentals are single-family houses. The costs of being a renter are often $500 to $1,000 less per month than purchasing.
Renting helps landlords owning unsold homes. It helps families who do not have the means for down payments. However, rental asking prices are going up.
Look to rent in housing markets where the cost of ownership is high. It means good neighborhoods, schools and services. A report identified five housing markets where experts say renting may be more affordable than owning.
- Northern New Jersey
- Long Island, New York
The decision to rent or buy is complex. The cost of owning a home includes maintenance and the possibility that the value of the house might go down. Experts advise talking to an accountant before making the decision.