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Renters Paying Substantially More While Owning Costs Less

Renters Paying Substantially More While Owning Costs Less | MyKCM

In a recent Insights BlogCoreLogic reported that rent prices have skyrocketed since 2005. Meanwhile, the typical mortgage payment has actually decreased.

“CoreLogic’s national rent index was up 36% in December 2018 compared with December 2005, while the typical mortgage payment was down 4% over that period.”

Renters Paying Substantially More While Owning Costs Less | MyKCM

Why the difference between the costs of renting versus owning?

It makes sense that rents have risen. However, how did mortgage payments decrease? CoreLogicexplained:

“It’s mainly because mortgage rates back in December 2005 were significantly higher, averaging 6.3% for a fixed-rate 30-year loan, compared with 4.6% in December 2018.

The national median sale price in December 2005 – $190,000 – was lower than the $220,305 median in December 2018, but because of higher mortgage rates in 2005 the typical monthly mortgage payment was slightly higher back then – $941 – compared with $904 in December 2018.”

Additionally, a recent report by the National Association of Realtors (NAR) showed that purchasing a home requires less of your monthly paycheck.

According to the Economists’ Outlook Blog, NAR’s February 2019 Housing Affordability Index showed that the “percentage of income needed” to pay the typical mortgage has decreased the last three months.

  • November – 17.3%
  • December – 16.9%
  • January – 16.2%
  • February – 15.9%

Bottom Line

What does this all mean to the current housing market? We think First American said it best in a post last week:

“The mortgage rate-driven affordability surge has arrived just in time… Rising affordability has already benefited home buyers and, if the lower rate environment persists, we’re in for a great spring home-buying season.”

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Jeff Duneske

With over 20 years of real estate experience, a career volume of over $250 million, over 1,000 properties sold, Jeff Duneske, broker/ owner of Duneske Real Estate Advisors at Keller Williams Advantage, has a lot to be proud of. However, his greatest source of pride is his honor: Jeff has built his business — and thrived in the industry — by instilling his clients’ trust.“ I have always said that we meet our clients at the crossroads of life and change — that we can make a difference, earn their trust and help our clients during this change.” “Knowing that I have earned the trust of over 1,000 clients and the privilege of guiding them through one of life’s largest financial transactions to achieve the American Dream is by far the greatest reward of my business.” Jeff was born and raised in Novi and earned the distinguished rank of Eagle Scout when he was 15 years old. In 1996, Jeff graduated from Novi High School and The Oakland Fire Academy and was intent on becoming a full-time firefighter. After serving as an auxiliary firefighter and EMT in Novi and Walled Lake for several years and not landing a full-time position on the force, Jeff decided to shift gears and find another professional path where he could help people and began his real estate career in 2000. Having been the #1 agent or team at various brokerages over his career, as well as the #1 team at Keller Williams Advantage and the #4 team in the Michigan-Ohio region of Keller Williams International in 2019, Jeff has certainly demonstrated his drive to reach for the sky and his commitment to his clients. “We never rest on our laurels, and we’re always improving our current systems — and implementing new systems — to boost efficiency and assure stellar service.” Jeff, who has served on the Professional Standards Committee for the past nine years, embraces a strong mindset to persistently achieve his goals without compromising his morals, standards, or ethics for anyone or any transaction. “You must uphold your standards because if you don’t uphold them, you have no standards at all.” “I run my life and my business by The Golden Rule: Treat others the way you would like to be treated.” Jeff’s noble purpose — conducting his business with the highest morals, ethics, and standards — has led him to a successful real estate career. More importantly, his ethical and moral standards have enriched his life and the lives of others in immeasurable ways … and because Jeff does not waver, he will continue to lead with purpose, honor, and great promise.

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