Fall Housing Outlook: Rent or Buy?

Home affordability has been helped by low mortgage rates

(CNN) – The housing market doesn’t hibernate in fall and winter, but it’s not nearly as hot as spring and summer. And those without school-age children may find it a good time to make a move.

Recent analysis by real estate website Zillow found that in many metro areas, renting is more costly than buying, simply because rents kept climbing during the recession, and didn’t drop like housing prices.

Home affordability has been helped by low mortgage rates, which have sat around four percent for much of this year, but may not stay there as the economy improves.

Vera Gibbons, a Zillow Contributor, said, “If you are looking to buy, the time would be now, because when mortgage rates go up, your purchasing power goes down, and it goes down pretty substantially.”

But there’s more to the housing market than mortgage rates, and that includes demand. Some markets are more challenging, even in the slower season.

New York, San Francisco and Los Angeles are among cities where prices have had the sharpest rebounds.

Gibbons said, “The problem is that home values are rising faster than income so these are markets that are virtually unaffordable to the masses.”

Even if the time is right for your particular market, it may not be right for you.

Before leaping from renting to buying, you’ll need a down payment, a solid credit history to ensure lower mortgage rates, and a budget to pay for things like maintenance, that a landlord takes care of now.

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