This housing market has Bank of America economists in a Shakespearean mood about the eternal debate: The slings and arrows of buying versus renting. In a recently released Hamlet-esque research note, “To buy or not to buy, that is the question,” BofA economists found that buying, to paraphrase the prince of Denmark, is an outrageous fortune these days.
Mortgage rates have created a sea of troubles for homebuyers, hitting the once-unthinkable 8% mark before falling for weeks in the wake of cooler-than-expected inflation reports and the prospect of an end to the Federal Reserve’s rate hiking cycle. While that’s nobler in the mind in terms of affordability, home prices have still risen substantially in just three years, and consumers don’t think it’s a good time to buy, the economists said, citing a University of Michigan consumer sentiment survey. The economists also suggested that buyers should anticipate the undiscovered country of a higher-for-longer rate environment (echoing other investment banks who have said as much.)
