Your Dollar buys you more-Much more!
Miami and Orlando are among the top real estate markets in the country where it is now cheaper to own than to rent a home.
Home prices and mortgage rates have fallen so far the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities, according to the Wall Street Journal’s third Quarter Survey of housing market conditions.
Mortgage rates are hovering around 4%, their lowest in sixty years! The result is a whopping 77% increase in buying power. In 1991, a $1,700 mortgage payment allowed a borrower to take out a $200,000 mortgage. Today, the same $1,700 gets that homeowner a $350,000 home loan.
Home ownership is also looking more affordable because after several years of declines, apartment rents will rise by around 4% this year according to sources quoted in the Wall Street Journal. It’s said rents are poised “to pick up even more momentum across the country next year.” So it may well be a good time to invest in rental property too.
Inventory Drop
Affordability could continue to improve as prices slide even lower in coming months. Price declines are likely because the share of “distressed” sales, including bank-owned foreclosures, tend to rise in the winter, when traditional sales activity cools. Banks are often much quicker to cut prices to unload properties quickly, which means that the greater the share of “distressed” sales, the more prices tend to fall. Another hopeful sign for the market is the drop in inventory. All 28 cities in The Wall Street Journal’s latest survey saw homes listed for sale fall from one year ago. Visible inventory was down sharply in several markets, including by almost half in Miami, and by about 1/3 in both Orlando and Tampa.
