CHICOPEE, Mass. (WWLP) – Mortgage rates are hitting a high point, making the prospect of buying a home hard on your wallet. These higher mortgage rates coupled with high home prices is making renting more appealing to a lot of people.
“I think the new fashionable way to do things is to rent, you know, a lot of people I’ve heard don’t want the ownership, or the responsibility of fixing roofs especially with what’s going on in Florida. They’re taking on long term leases and renting as an alternative to owning,” said Mark Teed, Senior Vice President of Investments at Raymond James & Associates.
Renting is appealing to older adults who are looking to downsize, but also people looking to wait out the current 6.61 percent mortgage rates. James Perez sold his home because it was too expensive to upkeep. He’s now renting until the market cools.
“Renting is good. You’re trying to save money, you’re trying to work on your credit, your credit rating. So maybe eventually we can get something, maybe even smaller,” Perez told 22News.
According to the Mortgage Bankers Association, the median mortgage is one and half times more than the median rent. Local realtors say the market for new homes is now less competitive and they have seen the overall demand for homes drop recently.
Lori Beth Chase, the President-Elect of the Realtor Association of Pioneer Valley expressed, “I think people are taking that step back saying, ‘you know, jeez, I was approved for $350,000 but now after all these rate increases I’m knocked down to 300 or 310.”
If you do decide to buy a home now, keep an eye on the numbers because you can refinance when rates drop.