WSJ.com – Nick Timiraos
Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities. The Wall Street Journal’s third-quarter survey of housing-market conditions in 28 of the nation’s largest metropolitan areas found home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc. Meanwhile, rent levels have risen across the country and mortgage rates, hovering around 4%, are the lowest in six decades. As a result, monthly mortgage payments on the median priced home—including taxes and insurance—are lower than the average rent levels in 12 metro areas.
It remains less expensive to rent than to buy in 15 cities including Detroit, Minneapolis, Orlando, Las Vegas, Miami, St. Louis, Chicago and Phoenix. Even cities where it is cheaper to rent than own have seen boosts in affordability. Mortgage rates are a big reason why affordability continues to improve. But at the same time, low mortgage rates aren’t spurring sales because few analysts expect rates to rise anytime soon. The Federal Reserve in August said it would keep rates at ultralow levels for two years.
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