Today's Mortgage Rates Little Changed
When Freddie Mac published its survey of mortgage rates for week ending June 3, the results shocked precisely nobody. The average for a 30-year, fixed-rate mortgage (FRM) was 4.79 percent, as close as it's possible to get to the previous week's 4.78 percent.
Shorter term FRMs were possibly the best mortgage deals, prompting Frank Nothaft, Freddie Mac vice president and chief economist, to observe: "... rates on 15-year fixed-rate mortgages set another record low for the third week in a row." They averaged 4.20 percent.
Best Mortgage Rates and the Buying v. Renting Debate
Having close to the best mortgage rates for half a century must influence the great buying v. renting debate. But there's a lot more to it than that.
The Wall Street Journal ran a feature June 3 that suggested that many people find it difficult to make cool, informed judgments on this topic. As a result, many people are currently so spooked by the residential real estate market that they're paying a premium to rent.
Some Factors to Consider
Of course, there's a lot more to deciding whether to buy or rent than just the figures. Here are three other considerations:
- You have to decide how likely it is that you and/or your partner might lose your jobs. Nobody is feeling wholly secure in the present employment market, but if you have real cause to think you might be let go soon, you probably shouldn't buy.
- If you're planning to relocate again within a shortish period, you're probably better off renting. The costs involved in buying and selling property can quickly blow any appreciation earned.
- Your credit score drives the cost of your mortgage. If you've had financial problems recently, and your credit report is less than perfect, then expect to pay a higher mortgage loan rate, and brace yourself for the possibility that you won't be able to find a willing lender.
The Bottom Line
For most, the deciding factor on whether to buy or rent is where you live. Dean Baker, who's an economist with a think tank in Washington D.C. (not the sort of job title you admit to at parties outside the Beltway), the Center for Economic and Police Research, reckons that you're usually better off buying if sale prices in your area are less than 15 times the annual rent for the same home.
According to the Journal, places where on this basis you may be better off renting include (with, in brackets, how many years' rent it takes to buy) New York City (32), Portland, Ore. (22), San Francisco (22), and Seattle (24). Cities where it seems better to buy include Las Vegas (11), Miami (8), and Phoenix (10).
Compare Mortgage Rates
Wherever you live, if you decide that you ought to buy your own home, then you should carefully research the home loan market, and compare mortgage rates.
Start by obtaining competitive mortgage quotes here.