This week, the economists at Capital Economics noticed an interesting phenomenon, according to the New York Times. For the first time in three decades, the median monthly mortgage payment is about the same as the median rental payment.
However, buying a home does have additional upfront expenses like a down payment and closing costs. Perhaps more important, not everyone has the option to buy.
Credit conditions are still significantly tighter than they were a few years ago, despite the Federal Reserve’s efforts to loosen credit markets. Many lenders now require a credit score of 700 as opposed to 650, the previous standard. Capital Economics estimates that that requirement alone has shut 13 million households out of the mortgage market.
See the chart here.
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