- High home prices and mortgage rates are locking a lot of first-time homebuyers out of the market.
- A monthly mortgage on a new home is now 52% higher than rent on an apartment, per WSJ.
- Mortgage and rent used to roughly cost the same, according to CBRE.
The average monthly mortgage on a new home is 52% higher than the average rent on an apartment as housing prices and interest rates continue to climb.
This represents an all-time high since at least 1996, The Wall Street Journal reports, based on data from real estate firm CBRE.
In the past, a monthly mortgage could cost the same or less as the monthly rent on an apartment, according to an April report from CBRE. The Journal reported this was the case from 1996 to mid-2003.
But a mixture of high-interest rates, low housing supply, and skyrocketing home prices have made purchasing homes much costlier, locking many first-time homebuyers out of the market.
For the first time in nearly two decades, the rate on a 30-year fixed mortgage hit 8% on Wednesday.
Goldman Sachs also recently predicted that home prices will continue to rise by another 3.5% by the end of 2024, barring unexpected economic setbacks.
Despite high-interest rates, experts told Insider that that doesn’t necessarily mean it’s a bad time to purchase a home.
For example, waiting for rates to fall back down may mean stiffer competition within the market, Daryl Fairweather, Redfin’s chief economist, recently told Insider’s Jacob Zinkula.
In general, there’s never a “perfect time” to buy a house, David Meyer, vice president of data and analytics at the real estate investing platform BiggerPockets, told Insider.
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