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According to an analysis done by USA Today of the US Census Bureau, there has been a shift from owner-occupied homes to more renter-occupied homes in several cities in the U.S.

Rent Prices Increasing

Due to the fact that the number of foreclosures and short sales has been on the rise, a lot of people can’t qualify for a home purchase because of low credit scores. Therefore, the only alternative for those who can’t purchase a home is to rent. Since the demand for rentals has increased, higher rent prices may be just around the corner. Fortune Magazine mentions, in an article published on May 25, that prices for rental apartments are expected to rise nationally by approximately 4.5 percent in 2011 and up another 3 percent in 2012 according to Rent.com. This means that if you were thinking about purchasing a home and thought that renting was cheaper than buying, the reality may be different.

Home Prices Continue to Decrease

Renting is not only for those who have had the misfortune of going through a foreclosure.  It’s an option for people who have never owned a home or prefer to rent because of the fear provoked by housing market news. After all, there are many different views about the condition of the housing market. Some think we have reached bottom, whereas others say that the worst is still to come. For instance, an article published on CNN Money, mentions that there has been a confirmed double dip in home prices in the first quarter of 2011. Prices are down 32.7 percent from their peak back in 2006. Headlines like these can be seen as discouraging, to say the least.

Best Time To Buy A Home: “Buy Low, Sell High”

On the other hand, there are those who feel like it really is the best time to buy. These people follow the “buy low, sell high” belief. It can be a great time to buy a house if you have a stable job and want to stay in the area for five or more years. In addition, if your goal is to invest and use the property as a rental, then it most definitely is the best time to buy a house since you can get a great deal and have a large supply of potential tenants.

Mortgage Rates Are Very, Very Low

Not only are home prices low, but also mortgage rates are still near record-lows. There are two ways to see the benefits of low mortgage rates:

1. An increase in mortgage rates can make a big difference in your monthly payment. For instance, a $300,000 mortgage at 5% would have a $1,600 payment per month. If we take the same $300,000 mortgage but increase the rate to 6 percent, then the monthly payment would go up to about $1,800.
2. When mortgage rates are low, you can afford more house – since your monthly interest payment is less, you can afford to pay for a larger home with a higher price (or, you could just enjoy the lower monthly payments if getting a bigger home is not a priority for you.)

If you decide that it is the best time for you to buy a home, make sure that you get informed and choose the best home, at the right location for the right price. Also, as mentioned before, plan to stay in your new home for at least five years in order to truly take advantage of today’s buyer’s market.

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