In recent reports, Deutsche Bank demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.
Before the housing downturn, people weren't wiling to pay much less to lease a house than to own it. With renting, you aren't paying the mortgage and taxes but you're still getting the same rooms to enjoy. However, rents are continuing to fall so housing will most likely follow suit. The article says that housing prices should stabilize and possibly increase by the end of 2010.
This is a pretty bright outlook on the housing market. It's good to see that prices will soon stabilize and possibly raise. People who were trying to get out of their homes but couldn't will have to wait longer for prices to get around where they once were so they won't take a huge loss if they were to sell now. I also like the use of rent as a measure of how the housing market is doing. While home prices were booming, rent was moving along it's normal pace. Therefore, rent is a better measure than home prices because home prices increased so rapidly.
Do you think rent is a good measure of the housing market? If not, what would be a better measure of the market in your opinion?
Full article
http://money.cnn.com/2010/02/12/real_estate/housing_prices_rents.fortune/index.htm
I think that leasing is a very good option for housing for people. I think that this is true mostly because it makes it easier for people who can't afford to buy a home to find a quality place to live. This is especially good because of how much the mortgage crisis attributed to the economic downturn. In addition, if people lease/rent more it will hurt the economy less because if they can't afford to pay rent anymore they will fall less into debt and there will most likely be another person willing to rent the house if they move out.
ReplyDeleteI agree and think that leasing is a good option as well. It's a nice way for people to find affordable housing and create some stability in their lives during these hard economic times, especially in the housing markiet.
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ReplyDeleteI too agree the leasing seems like a good option for both the landlord and the renter. My parents are actually leasing the house we moved from 4 years ago because they did not want to sell it for such a cheap price. It is very risky to try to lease a house because of the fact that if one does not rent it, you will still have to pay the mortgage and what not but it's a good option if it works.
ReplyDeleteYeah there is some risk and reward with selling a house. I know friends of mine have their old houses also rented out so they didn't lose money on selling their house. Right now i think more people would rent out a house before purchasing because even though it is not goo din the long run it is a good way to live until u have enough money to make a move towards your own house.
ReplyDeleteThe prediction that the house market will stabilize by the end of 2010 is glorious. After all the fraud and lies the past few years, it will be a relief from the ridiculous interest rates, mortgages, and rent prices.
ReplyDeleteMy parents finally paid off their mortgage a few years ago, but are now forced to pay really high property taxes. The bills just never stop. E
this post remind me about the video we saw in the class, the mortgage crisis.
ReplyDelete"With renting, you aren't paying the mortgage and taxes but you're still getting the same rooms to enjoy"
People would like to renting their houses instead of paying mortgage to the bank.
So I think rent is a good way to measure the housing market.
Leasing is a very ideal solution for people who struggle to pay house payments. The mortgage crisis that people are going through has had an incredible negative effect on our economy. I agree with Rich when he states that renting/leasing will be beneficial to our economy because of the fact that people who can't afford to pay rent will avoid large amounts of debt, while other people can take on the duties of their lease/rent.
ReplyDeleteLeasing and renting always are better situations for most families when the housing markets are down as many people have said above. I think it can be a good indicator of how the housing market is doing but i think we should always keep house prices, sales, and construction as key indicators as well.
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