Renter’s market
For Americans looking to get their foot on the property ladder, buying has perhaps never made less financial sense: CBRE analysis, cited by the WSJ, suggests that average new monthly mortgage payments are now 52% more expensive than typical rent on an apartment in the US. This disparity is now the most pronounced that it's been across the 27-year span of CBRE’s research.
Unreal estate
Various factors have coalesced in recent years to make the concept of buying a house, for many people at least, something of a pipe dream. The new analysis adds to the evidence that housing is at or near “peak unaffordability”, as steep prices, low inventory, and still-rising mortgage rates keep bidders at bay.
Theory would suggest that rents and house prices should move roughly in line, but the real world is rarely so neat and tidy. Indeed, CBRE’s analysis suggests that buying was the “value option” for much of the 2010s — a period that must feel far away for the 51% of non-home-owning Americans who fear they’ll never afford that first purchase.
Where we go from here depends on your perspective: either rents are about to soar to catch up, or house prices could be set to drop.
