<br><div><aside class="gnt_em gnt_em__fp gnt_em_vp__tp gnt_em__el" aria-label="Video - How to decide between renting or buying a home"/><p class="gnt_ar_b_p">Generations of consumers have embraced homeownership as part of the American dream. Lately, though, it looks more like a pipe dream.</p><p class="gnt_ar_b_p">“Housing is becoming a luxury good,” said<a target="_blank" href="https://business.columbia.edu/faculty/people/christopher-mayer" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> Christopher Mayer</a>, a Columbia University economist.</p><p class="gnt_ar_b_p">The upside? It’s a great time to rent. The spiraling costs of homeownership have turned the perennial rent-vs.-own equation on its head. In most of the nation’s largest cities, renting is now far cheaper.</p><p class="gnt_ar_b_p">The median sales price for existing homes rose<a target="_blank" href="https://cdn.nar.realtor/sites/default/files/documents/ehs-12-2023-summary-2023-01-19.pdf?_gl=1*surp5g*_gcl_au*MTQ5MzM0NzYxLjE3MDgwMDM1ODM." data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> more than 40%</a> from early 2020 to mid-2022, to a seasonal peak just above $400,000, according to the National Association of Realtors.</p><aside aria-label="advertisement" class="gnt_m gnt_x gnt_x__lbl gnt_x__al"/><p class="gnt_ar_b_p">Prices are still rising: The median sale price for an existing home<a target="_blank" href="https://www.nar.realtor/newsroom/existing-home-sales-slid-1-0-in-december" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> was 4.4% higher</a> in December 2023 than in December 2022.</p><p class="gnt_ar_b_p"><strong>Learn more:</strong> <a target="_blank" rel="noopener" data-t-l=":body nav (pl)|e|auto spike click:6|${u}" class="gnt_ar_b_a" href="https://www.usatoday.com/money/blueprint/personal-loans/best-personal-loans/">Best personal loans</a></p><p class="gnt_ar_b_p">Mortgage rates, meanwhile, are<a target="_blank" href="https://fred.stlouisfed.org/series/MORTGAGE30US" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> twice as high</a> now as in early 2022: 6.8%, as of mid-February, compared to just over 3% at the start of 2022.</p><p class="gnt_ar_b_p">Taken together, those two trends yield frightening math.</p><figure class="gnt_em gnt_em_img"><img class="gnt_em_img_i" style="height:440px" fetchpriority="high" data-g-r="lazy" src="https://www.usatoday.com/gcdn/authoring/authoring-images/2024/01/09/USAT/72160030007-ap-national-association-of-realtors-ceo.jpg?width=660&height=440&fit=crop&format=pjpg&auto=webp" srcset="https://www.usatoday.com/gcdn/authoring/authoring-images/2024/01/09/USAT/72160030007-ap-national-association-of-realtors-ceo.jpg?width=1320&height=880&fit=crop&format=pjpg&auto=webp 2x" decoding="async" alt="The current buy-vs.-rent equation favors renters."/></figure><h2 class="gnt_ar_b_h2">Rising mortgage rates should have pushed home prices down. They didn't</h2><p class="gnt_ar_b_p">Imagine you bought a $400,000 home, and you made a 20% down payment.</p><p class="gnt_ar_b_p">At 3.2% interest, your monthly principal and interest on a 30-year mortgage would have totaled $1,383, according to a Bankrate<a target="_blank" href="https://www.bankrate.com/mortgages/mortgage-calculator/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> mortgage calculator</a>.</p><p class="gnt_ar_b_p">At 6.8%, the same mortgage would cost you $2,086.</p><aside aria-label="advertisement" class="gnt_m gnt_x gnt_x__lbl gnt_x__al"/><p class="gnt_ar_b_p">“It’s the least affordable housing market in recent memory,” said<a target="_blank" href="https://www.redfin.com/news/author/darylfairweather/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> Daryl Fairweather</a>, chief economist at Redfin.</p><p class="gnt_ar_b_p">Rising interest rates slowed the upward march of home prices, even leading to <a target="_blank" href="http://www.usatoday.com/story/money/2023/05/31/is-housing-market-going-to-crash/70260153007/" rel="noopener"></p></div> <style> .wrapper { text-align: center; } </style> <div class="wrapper"> <a class="button" href ="https://www.usatoday.com/story/money/2024/02/16/housing-market-favors-rent-vs-buy/72599444007/">Read more <span>➤</span></a> </div>
