Reply to Is the delta between renting & owning now so high that it really just makes sense to rent?

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Reply to "Is the delta between renting & owning now so high that it really just makes sense to rent?"

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[quote=Anonymous][quote=Anonymous]A point that hasn’t been made is that it will likely be possible to refinance at a lower in a couple years. But renting seems like the winner financially right now.[/quote]

Very true. But it is also a gamble. If you take out a 7.5% mortgage, it may not drop below 6% for many years to come. Which is possible. It's hard to predict where we're going with interest rates. Who knows. No one knows. History does suggest we should see sub 5% and reverting to a more average 4% but there have also been other spells where interest rates were high for a long, long time.

A big part of what's happening is prices are still stubbornly high and that is because of a significant to severe undersupply of housing partly caused by few people giving up low mortgage rates and because of an underbuilding in the 2010s that is catching up with population growth. But we may be reaching the highest pricing point with current interest rates and I see signs of that happening. In short, if rates continue to climb, prices will have to soften a bit. But if they stay around 7-8%, prices are not dropping.

Interestingly enough, on the college board they're talking about the demographic time bomb, which is that the number of college age kids is going to start falling, sharply, in the next few years and how that impacts admissions rates. One can also speculate how that will affect the real estate market ten years afterwards! But that means looking at the market 10-15 years from now and we have to live between now and then. [/quote]

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