Data from Zillow Group Incorporated shows that renting a home surpasses buying one for the first time in years.
This specifically relies on a few conditions. The mortgages studied in the data were 30-year payments with a 7.18 percent rate. These houses typically cost around $350,000 and were purchased with a 10 percent down payment.
What Zillow found was that these mortgage payments had been steadily increasing since 2015. They finally became more expensive than the median rent in September of 2022. Tack on the fact that mortgage rates have topped 7.5 percent for the first time since 2000, and it makes for a difficult market to navigate.
The situation worsens in high-price markets like in California, where renting is cheaper than owning a house by thousands of dollars.
But in the face of this data, younger families are still looking to move into houses and are seeking other means of financial support to do so. A Redfin report shows that 38% of recent homebuyers under the age of 30 used money from family to help afford their down payment.
This comes as a Bankrate study shows that affording a house is the number one obstacle for those looking into the housing market. The Biden administration recognizes this and is attempting to help those who can’t afford a house.
A new rule from earlier this year changes mortgage fees based on a borrower’s credit score. But the catch is that your rate is likely to be higher with better credit in order to grant lower rates to those with bad credit.
An opinion piece on USA Today phrased this new rule as “mortgage socialism” with the goal of “equitable” home ownership. This type of socialism may be expanding to regular loan applications as well.
According to various reports, the Biden administration has issued a strong warning to banks and other financial institutions to not deny credit applications from illegal immigrants based solely on their immigration status.
This warning is in the name of “fair access to credit,” according to Consumer Financial Protection Bureau Director Rohit Chopra. The warning cites the Equal Credit Opportunity Act as the central argument – saying its discrimination protection clause extends to include immigration status.
All of this data combined with the complications from the Biden administration make the housing market a labyrinth, especially for those just getting into it.
But despite the adversity, homeownership proves to be an important factor for Americans. In fact, 74% of U.S. adults in a previous Bankrate study say homeownership is a part of the American dream.