Do you have a more direct comparison between monthly rental costs versus mortgage payments? They are both housing, and while a mortgage rate is related to monthly cost, a doubling of interest rate there doesn't double the monthly cost. I'm wondering if rents are rising enough faster than mortgages that it's helping drive a shift towards ownership.
Mortgage rates seem a lot less locked in, so maybe people are less concerned by them. If rates go up, you keep your older, lower rate. If rates go down, you have the option to refinance at the new lower rate and take advantage of the drop.
Hi Andrew! I don't have the exact data at my fingertips, but mortgage rates have gone up a *lot* over the last year, so I would expect that the mortgage payment on a typical home has gone up a lot more than the rent on a typical home. As you say, some people may be biting the bullet and accepting high mortgage payments in the short run in the hopes that mortgage rates come down in a few years and they can refinance. But I would still be surprised if the changes of the last year has pushed people into owning who otherwise would have rented. If anything I would expect people to be keeping their rented apartments for longer while they wait to see if rising mortgage rates trigger a decline in home prices.
Do you have a more direct comparison between monthly rental costs versus mortgage payments? They are both housing, and while a mortgage rate is related to monthly cost, a doubling of interest rate there doesn't double the monthly cost. I'm wondering if rents are rising enough faster than mortgages that it's helping drive a shift towards ownership.
Mortgage rates seem a lot less locked in, so maybe people are less concerned by them. If rates go up, you keep your older, lower rate. If rates go down, you have the option to refinance at the new lower rate and take advantage of the drop.
Hi Andrew! I don't have the exact data at my fingertips, but mortgage rates have gone up a *lot* over the last year, so I would expect that the mortgage payment on a typical home has gone up a lot more than the rent on a typical home. As you say, some people may be biting the bullet and accepting high mortgage payments in the short run in the hopes that mortgage rates come down in a few years and they can refinance. But I would still be surprised if the changes of the last year has pushed people into owning who otherwise would have rented. If anything I would expect people to be keeping their rented apartments for longer while they wait to see if rising mortgage rates trigger a decline in home prices.