Monday’s National Association of Home Builders’ (NAHB) report indicated July multifamily permits, apartment and condo buildings, were up 2.5% from June. Meaning apartments and condos might be the next move for current homebuyers while waiting for interest rates and home prices to come down.
On the other hand, single family home permits came in 4.3 % lower than in June. New construction inventories are starting to pile up with buyers hitting the pause button. This has builders now offering an average discount of 5% to lure homebuyers back into the market.
Mortgage rates tick higher
Mortgage rates continue to chop around with the 30-year fixed moving up slightly to 5.29%. Different factors like wage gains, high inflation, low unemployment and lackluster GDP numbers keep the market tossing and turning.
The hope is to see mortgage rates begin to hover consistently around the 5% range and then we might start to see some overall stability in the market. And stability is ideal for the market.
Does the rent to own approach work?
Whether you’re a first-time homebuyer or in a must-move situation, rent-to-own might the answer to this tough real estate market.
This option lets you rent a property before opting to buy, giving you more time and flexibility to wait for the market to cool and rates to change before applying for a mortgage.
How does rent-to-own work? Typically, you to make monthly payments throughout the term of the lease with a portion of the money going towards a down payment. Rent-to-own agreements vary making it vitally important to thoroughly understand the terms of your contract and how your monthly rent payments are being distributed before signing the lease.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate & its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
John Kistner is Guaranteed Rate’s Market Analyst. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.