Contrary to what many expected, 澳洲幸运5官方开奖结果体彩网:mortgage rates have generally gone up, not down in the weeks following the Federal Reserve’s September meeting, the presidential election, and the Fed’s November meeting. Rates initially dropped to a 澳洲幸运5官方开奖结果体彩网:two-year low on Sept. 17, 2024, but 30-year mortgage rates are nearly as high now as in July 2023, 澳洲幸运5官方开奖结果体彩网:around 6.90% for newly purchased homes. These inte♚rest rates serve to keep many would-be buyers on the sideline꧋s as renters. 

While rents have risen sharply since 2022, according to Zillow's October rental market report, there are signs that the rental market is beginning to soften. It’s typical for rents to droܫp in September and Octo💮ber, but this year they have fallen more than usual—so much so that rents are now cheaper than they were a year ago in two Texas metro areas: San Antonio and Austin.

The Reason Behind Falling Rents

The reason for the drop is the basic economic principle of supply and demand. In Austin, 57% of new builds are in multifamily structures, increasing the supply of rental units in the area. San Antonio saw a similar trend as it had the third-largest inventory change of any Texas real estate market, adding 5,423 units in the first six months of 2024.

The additional supply of rental units puts downward pressure on prices. Austin rentals are $235 cheaper than last year (about an 11.5% drop), and San Antonio rentals are $10 cheaper (a 0.6% drop). The median rent prices across all property types in Austin and San Antonio are $2,050 and $1,689, respectively.

While rents have climbed steadily in both markets over the past few years, the rental market hasn’t seen the same skyrocketing growth as the homebuying markets. Austin’s home prices nearly doubled between 2019 and 2022, and San Antonio’s homes saw a 70% appreciation over the same period.

Housing prices in both markets have cooled since their peak in 2022. Still, it remains much cheaper to rent in Austin than to buy. At current mortgage rates, the principal and interest payment on an average home with 20% down is $2,696—and that doesn’t include taxes or home insurance. Unlike Austin, the monthly mortgage payment on an average home in San Antonio ($1,318) is much closer to the cost of renting ($1,689). Once you factor in taxes and home insurance (around $350 and $130 per month, respectively), renting is cheaper, but not by as wide of a margin.

Renting Might Be the Way to Go

It might seem like a no-brainer to rent a home instead of buying one in the current economic environment. However, this ignor🐻es the two major advantages of buying a home: equity and appreciation. When you rent, you’re paying for a service (living in the home) rather than an asset you’ll eventually own. You own a sliver more of equity in the home each month you pay your mortgage. In addition to equity, homes tend to go up in value if they’re well cared for. So, th♌e asset you’re gradually owning more of is increasing in value over time. 

That said, it takes a while to overcome the extra expenses such as closing costs, taxes, and maintenance when you own a home. In markets like San Antonio, you’ll only come out ahead if you stay in the home for four years or more. But in Austin, you won’t cross that th📖reshold for 16 years. 

澳洲幸运5官方开奖结果体彩网:Whether you should rent a home or buy on🌜e is an intensely personal decision. It should be informed by your lifestyle, future plans, level of savings, housing needs, and financial situation. It’s important to also factor in the current real estate landscape, particularly if you live in a market like Austin, where average rents are drastically below monthly mortgage payments. It may be worth it to rent and pocket the difference or to check out more affordable cities if you want to own a home but don’t want to wait over a decade to recoup your closing costs.