When considering whether or not to rent or buy, it is often essential to evaluate the real estate market. If rental prices are too high relative to what it would be to buy, then renting doesn’t make much sense. Conversely, if housing prices result in mortgages that are significantly above what it would cost to rent, then renting makes a lot of sense. Many people are unaware of the various resources that are online that let them evaluate the health of the real estate market. From interest rates and trends to average home prices; you can explore all the data you need to make the right decision from a few sites!

Zillow Has A Trove Of Data Freely Available

Site: https://www.zillow.com/home-values/

Zillow, one of the largest real estate selling platforms in the United States, has a ton of data that is available for free online. You can take a look at home values and also see their trends over time. At this moment (August 2020), the median home value in the US is $229,000. This figure is up 5.2% from the previous year.

One of the beautiful things about Zillow is that they have very localized data. For example, if you search for Boston, MA, you will see that home prices there are about $592,000 and that they have only gone up 1.3% since last year. You can even search by ZIP codes, and Zillow also makes forecasts. How accurate those forecasts are is sometimes up for debate, but having the outlook gives a rough ballpark of what the market will do in the coming year. If Zillow predicts an increase of 5%, for example, it’s unlikely the market will go down in the next year.

Rentometer Has Rent Data Available

Site: https://www.rentometer.com

If you are looking to understand the rental market better, then the best resource by far is Rentometer. This site allows you to type in any address in the United States and Canada to find what the median rent is in the area. Continuing with the example of Boston, MA above, a lease within a 2-mile radius around the Boston city hall has a median of $1,750 per month. Around the Cambridge, MA city hall, the price skyrockets to $2,895. Rentometer has a paid option that lets you see trends citywide. However, the free version is incredibly detailed and enables you to see how much apartments cost in the area in which you want to live. Using the data from Rentometer, you can compare the rent prices with Zillow to determine whether or not renting is more affordable than buying. If you’re willing to splurge on the pro account, you can also see rent trend data. Understanding the trends may give you an idea of whether or not you want to sign a lease now or wait a bit for the rent to decrease.

St. Louis Federal Reserve Mortgage Rates

site: https://fred.stlouisfed.org/series/MORTGAGE30US

If you are looking for average mortgage rates and trends, the St. Louis Federal Reserve has a significant amount of data available online related to this. You can look up interest rates going back to 1971, and you can also see the weekly trends. This data is available for 30-year mortgages, 15-year mortgages, and even 5/1 ARM loans.

This data may not seem necessary for those looking to rent or buy a property, but it is quite critical. Higher interest rates usually mean that buyers have more difficulty qualifying for home loans. As interest rates rise, property prices often struggle to keep their upward momentum. On a $500k mortgage, a rate increase of even just 0.5% can mean an extra $150 a month. Buyers then put pressure on sellers to keep prices low to compensate for the fact that they will be paying a lot more in interest to the bank. Frugal buyers may also figure that since mortgages are getting expensive, they’ll wait until the next recession to jump into the housing market.

Higher rates and home prices put upward pressure on rentals. As buyers face more expensive mortgages fueled by rising property prices and interest rates, renting seems like the smarter choice. Home buyers begin to figure that they will wait until the market cools off. Once the recession comes, rental prices often increase because people are forced to rent. However, as the market stabilizes and properties begin their upward march, people realize it’s an excellent time to buy. This inflection point leads to a reduction in rental demand, making the rental market more affordable.

Interest rate trends can give you an idea of whether or not it is a good idea to rent or buy. By understanding the rates, you can figure out if it is economically better for you to rent now and buy later or rent for the long-term. It may even make sense for you to jump into the housing market right now.

Browse Zillow, Realtor, and Other Related Sites

The resources mentioned above are about evaluating markets on a broader scope. If you’re looking broadly at whether or not it is the right time to buy or rent; then these resources are what you need. However, nothing beats browsing online for real listings that interest you. Broad trends give you a good idea of where the market is heading, but if there are no homes that interest you at the moment, then you can’t make a purchase. By looking online at real estate sites like Zillow or Realtor, you can get a good feel for how much homes in your area cost. You can also see what features you would want in a house and how much money those features require.

Similarly, looking at various rental sites will give you a good feel for what is out there, if you have decided to rent. Real estate trends are significant, but what matters at the end of the day is that you have a place you love at a price you can afford. By looking at the local listings, you’ll have a better chance at uncovering that information.

Use The Internet!

We have seen various sites that will help you evaluate the current real estate market. Zillow has a lot of essential data. Rentometer is excellent for understanding rents in specific areas. Also, the St. Louis Fed data lets you evaluate current and historic interest rates. Finally, platforms like Zillow let you see local listings that might be of interest to you. Remember that it is sometimes difficult to predict the real estate market. Trends that apply in one state or area may not affect another. Use the data to evaluate the overall health of the real estate market, but don’t forget to look at local listings to see what is or is not of interest to you. Once you discover the home or rental you love, don’t hesitate to make it yours!

This article is authored by a prominent, Province & Domain agent, Joshua Monteiro. To learn more about him, click here.