As Kim Valentine waits for her Wendell, N.C., house to be sold or foreclosed upon by her bank, there's one thing she's certain of -- she won't be buying another home anytime soon.
"I think I'm just going to stay where I am," said Valentine, 45, who began renting a house in May after a divorce left her unable to make her monthly mortgage payments. "It's just the way the economy is right now. It's just too uncertain to make any permanent decisions."
Among the many things to come out of the recession is a significant increase in the number of people who are no longer able, or willing, to buy a house.
Some can't buy because they can't sell their existing homes. Others have damaged their credit to the point that getting a loan is no longer possible. Still others have decided to rent because their economic futures are too uncertain to justify taking on mortgages.
"We are seeing a real increase in people questioning whether renting or buying is right for them," said Tara-Nicholle Nelson, a spokeswoman for the real estate website Trulia.com. "And that's something that's totally an artifact of the recession."
This year, Trulia created an index that compares the cost of renting versus owning in 50 markets across the United States.
Most of the cities where buying is most affordable are foreclosure hot spots such as Miami, Phoenix and Detroit. Those cities are also seeing rental rates rise as foreclosed upon homeowners rush into rental properties and drive rates up.
Cities where renting makes the most sense are San Francisco and New York, where prices are high and rent control laws make renting more affordable.
Perhaps the biggest factor in favor of buying instead of renting is interest rates, which continue to be at historically low levels.
Stacey Anfindsen, a Cary, N.C., appraiser, recently estimated that a buyer would save $10,000 over four years with today's average 30-year fixed-rate mortgage compared to where rates stood a year ago. The savings totaled $26,352 over four years when he compared today's rates with those in 2007.
"If you're thinking about buying a house, almost irrespective of the price, the mortgage rate is such a huge factor," Anfindsen said.
Still, those savings appear not to be enough to get many people off the fence.
Valentine, the executive director of the Zebulon (N.C) Chamber of Commerce, now lives with her two daughters in a 1,200-square-foot rental home that costs $650 a month. The mortgage payment on the house she owns with her ex-husband is more than $2,000 a month.
(Contact David Bracken at david.bracken(at)newsobserver.com)
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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