Buying home is still cheaper than renting, Housing market has cooled for Q4, Refinances for 2017 will show decline
October 21, 2016
Online real estate listing service Trulia reported on Friday that buying a home is still cheaper than renting. Trulia said that purchasing a home is 37.7% cheaper than renting across the nation for those who move every seven years and put 20% down. Trulia went on to say that buying is cheaper than renting in each of the 100 largest metros. In addition, the range is from over 50% cheaper in Miami and Fort Lauderdale, Fla., to under 20% in Honolulu and San Francisco.
Freddie Mac reported on Thursday that as the fourth quarter unfolds, housing market activity has cooled considerably and home sales and home purchase mortgage activity should enter their seasonal lull. Mortgage application data indicates that mortgage refinance activity is slowing from the highs reached this summer, but on a year-over-year basis refinance applications are still up about 30%.
In addition, Freddie Mac expects $1 trillion in refinance mortgage originations in 2016, but 2017 volume will decline 41% to just under $600 billion. Home purchase and home improvement mortgage activity will somewhat offset this, rising from $1 trillion in 2016 to $1.15 trillion in 2017. Total mortgage originations will fall about 18% from 2016 to 2017 in our forecast. In closing Freddie Mac forecasts that house prices will grow at a 5.6% rate year-over-year in 2016, slowing to 4.7% in 2017.