New Orleans If you’re in the market to buy a house, you’re in trouble. The current economy is not your friend.
The bad news just keeps on coming.
- Interest rates have jumped to 5.27%, the highest level in 13-years, piling hundreds of dollars onto monthly payments, and over 30-years, a wheelbarrow full of money.
- Compared to the search before the pandemic, The Economist reports that you would now need to save another $15,000 to make a 10% down payment, if you can find a banker willing to take that little.
- The refinance market is tanking, which doesn’t really affect prospective homebuyers, but lessens the companies in line to help you finance or service your loan.Estimates in the Wall Street Journal indicate that the Mortgage Bankers Association believes refi’s will only make up one-third of a company’s business in 2022 compared to almost 60% in 2021.
- Wall Street and private equity companies are still circling the market and scooping up prospective homes as rentals, since they believe the harder it will be for families to buy homes, the more profitable rentals will be.
You get the picture. If you don’t have deep pockets, you’ll be renting for a good long while before your dream of a home can be realized. It’s too bad, since a recent survey also ranked owning a home more important to many Americans than satisfaction at work or their family’s security.
People are hunkering down and extending their leases, adding on years while they try and save money for the future. Surely, this is the time where might be a convergence of the ongoing crisis for families seeking affordable rental housing and homeowner wannabes stuck in rentals who finally might stand with us for more rental security and, dare I say, rent control.
I’m probably dreaming, aren’t I?
There still seems to be a story every other day about civic and homeowner associations fighting to block development of apartment complexes anywhere near where they are. Politicians are still jumping over themselves with proposals to help homeowners even though the mortgage interest deduction is the largest semi-social program in the federal budget. Rents and rentals are still pretty much the province of local and state governments, while the federales take a walk on the issue.
But, even if not “real” rent control, why can’t there be more protections against evictions as an excuse to jack up rents? Or, guidelines like some cities have that cap the level of annual rent increases? Or, preferences for tenants to renew on existing leases? Or, real inspections and requirements for adequate maintenance?
There aren’t enough affordable homes, and now it’s going to be harder for any but the richest to buy what might be available. It’s time to do more for tenants.