OT: rental prices

[biodawg]

I just saw on a neighborhood Facebook chat that my next door neighbor, who is renting, is paying over double for what I pay on my mortgage on our house we bought nine years ago. Now I know the renter has to make money, and I knew that the housing market got pretty out hand in the last 4 or so years, but I was just surprised to see that number. Is that pretty par for the course?

Maybe a few of yall can fill me in. I feel like I may have dealt with @vhdawg when we bought our house years ago.

ETA: this is in Madison/Gluckstadt area.

 

[civildawg88]

Rule of thumb for rent I heard a few years ago was $1 per sq ft per month. Not sure if that's the case anymore though

 

[DesotoCountyDawg]

Rule of thumb for rent I heard a few years ago was $1 per sq ft per month. Not sure if that's the case anymore though

That’s not far off give or take.

 

[biodawg]

Rule of thumb for rent I heard a few years ago was $1 per sq ft per month. Not sure if that's the case anymore though

This would be about $1.40

 

[ZombieKissinger]

I just saw on a neighborhood Facebook chat that my next door neighbor, who is renting, is paying over double for what I pay on my mortgage on our house we bought nine years ago. Now I know the renter has to make money, and I knew that the housing market got pretty out hand in the last 4 or so years, but I was just surprised to see that number. Is that pretty par for the course?

Maybe a few of yall can fill me in. I feel like I may have dealt with @vhdawg when we bought our house years ago.

ETA: this is in Madison/Gluckstadt area.

I rent at a rate slightly lower than my mortgage, but about $1000/mo goes to principal right now. Probably could’ve gotten a little higher. Depends on a lot of factors, but when I recently looked to rent vs buy in a new area, I evaluated rental prices vs mortgage/escrow at current interest rates and it was about even in $/mo where I was looking. I see slightly below and slightly above both where I’m moving and where I moved from, but prices have increased from 9 years ago as have interest rates, so not surprising yours is a good bit lower than the current rental price

 

[HWY51dog]

Yes, especially if a hedge fund owns it. They even have escalation clauses in rental agreements. As of 2022 they owned almost 600,000 homes nation wide.

 

[PooPopsBaldHead]

Yes, especially if a hedge fund owns it. They even have escalation clauses in rental agreements. As of 2022 they owned almost 600,000 homes nation wide.

Remember, there are approximately 50 Million rental units in the US. So 98.8% are owned by more traditional landlords... Like half the people on this board. The market is not being moved by institutional investors, it's ridiculous increase is really a result of fiscal and monetary shenanigans. The hedge funds are just taking advantage of the situation. Like the rest of us landlords.

Rent is up because mortgages are up. Mortgages are up because we 17ed supply and demand up the poop shoot after the GFC and then went in raw dawg in COVID. You can pry my sub 3% rate from my cold dead hands. I'm now grossing $1500 a month in profit off a rental house I purchased in 2021... The rental profit is almost covering my personal mortgage. If you bought the rental today at the median Zillow estimate, 20% down, and at 6.8% interest... The monthly mortgage would cost $2500 a month more than I am charging for rent.

Rent is through the roof, yet still a bargain compared to buying.

 

[GloryDawg]

There are a lot of headaches that come with owning a house. I think once you figure insurance, tax, dealing with HOA and maintenance renting still might be less expensive. When the air conditioning goes out in the summer, and you rent just make the phone call. If you own you are paying out thousands. Plumbing issue if you rent just make the call. If not, you are paying a lot of money to a guy who don't have to pay his own student loans.

 

[MSUDC11-2.0]

I rented in Starkville from 2016-2018. Think I paid like $850 a month for a two bedroom apartment 6 years ago. That same apartment in 2024 is now $1,600 a month per the development’s website. I’ve owned two different houses since then and my mortgage payment has never even been $1,600 per month

 

[PooPopsBaldHead]

I rented in Starkville from 2016-2018. Think I paid like $850 a month for a two bedroom apartment 6 years ago. That same apartment in 2024 is now $1,600 a month per the development’s website. I’ve owned two different houses since then and my mortgage payment has never even been $1,600 per month

What's your interest rate? Now tell us what you'd sell your house for today, and let's figure out the mortgage at a 7% rate, with insurance and property taxes stepped up to today's value.

 

[Maroon13]

 

[jethreauxdawg]

Yeah, he’s doubled down, dems always love to spend, but that last guy really got the ball rolling downhill in the money printing department. That’s my gripe with the last guy.

 

[MSUDC11-2.0]

What's your interest rate? Now tell us what you'd sell your house for today, and let's figure out the mortgage at a 7% rate, with insurance and property taxes stepped up to today's value.

I just sold a house for $100K more than I bought it for in 2018. Was able to make what I think is a very good down payment on our new house and that helped a lot. I will qualify by saying I currently do not escrow insurance and taxes so my new monthly mortgage payment is only principal plus interest. But even if I did escrow, It would only be a little bit more than $1,600.

Yes, today’s interest rates suck hard and I’m not thrilled with what I got. Maybe a refinance is an option if rates improve in the next year or two. I think our old interest rate was like 4.6% and I used to think that sucked. Would love to have that nowadays.

 

[ZombieKissinger]

I just sold a house for $100K more than I bought it for in 2018. Was able to make what I think is a very good down payment on our new house and that helped a lot. I will qualify by saying I currently do not escrow insurance and taxes so my new monthly mortgage payment is only principal plus interest. But even if I did escrow, It would only be a little bit more than $1,600.

Yes, today’s interest rates suck hard and I’m not thrilled with what I got. Maybe a refinance is an option if rates improve in the next year or two. I think our old interest rate was like 4.6% and I used to think that sucked. Would love to have that nowadays.

I mean, yeah, if you make a big downpayment and don’t include taxes and insurance, your mortgage payment will be low

 

[kired]

I still get automatic updates from my realtor on houses in our old neighborhood from when we sold our house in 2020. Just saw an 1850 sqft house listed for $300,000. It's a 50% increase from what those houses were selling for 4 years ago.

 

[TrueMaroonGrind]

I still get automatic updates from my realtor on houses in our old neighborhood from when we sold our house in 2020. Just saw an 1850 sqft house listed for $300,000. It's a 50% increase from what those houses were selling for 4 years ago.

We bought our house in June 2020 and we estimate it is worth somewhere around 40% more than when we bought it. Just got lucky. Hopefully those insane price increases are over for quite a while. People who haven’t bought a house in the last 5 years or so are in shock when they see the market now. Primary example one is the OP here.

 

[RockyDog]

If you want to pay rent for a house less than $1500 in the metro area, you may luck out in Pearl, Richland, out in the country areas of Rankin, or Jackson city limits into Byram.

Little 2/2 or 3/2 houses with one car garages in Barnett Bend easily go for 16-1800+. You are lucky to find apartments in the 39047 under 1200.

I don't see how young kids today are going to make it. My first studio apartment in the late 90s was about $450. Sure about 1/3 of my income went to housing back then but i could still live. Some kid would have to be bringing down 50K or more to be spending 1/3 of their income on housing these days.

That's what our fat, blotchy guv doesn't get. He's so worried about keeping the poors in their place and he doesn't even realize how badly the middle class is getting it these days.

 

[The Cooterpoot]

This would be true except Trump should be helping pump too. He started the handouts. Even came with a "Trump Signature" and brag on the letterhead.

 

[dorndawg]

This would be true except Trump should be helping pump too. He started the handouts. Even came with a "Trump Signature" and brag on the letterhead.

If you think $600 checks were bad, wait until you find out about PPP welfare.

You can search by ZIP here if you are curious https://projects.propublica.org/coronavirus/bailouts/

 

[MSUDC11-2.0]

I mean, yeah, if you make a big downpayment and don’t include taxes and insurance, your mortgage payment will be low

Still not as low as I would like with these hideous interest rates.

That said, we did not have a big down payment on our last house and did escrow then (plus had to pay PMI), and for a $190K 3 bed/2 bath house our mortgage payment was on par with or less than what our rent would’ve been had we stayed renting our apartment another couple of years.

 

[ETK99]

Here's some facts:
In the 24 months beginning March '22, the housing market saw rates up 500 basis points. From that March to July, there were 17% fewer sellers. Peak volume was 6.6 million in January '21. By Oct '23, it was down to 3.9 million. Housing is tight as hell! Someone with a 4% rate is 50% less likely to sell when rates are 7%.
As for Starkville, Mississippi is one of the top six states for purchase demand/growth in the U.S. MS is up 20% this year. A big part of why the Starkville market (and other MS markets) are so crazy right now (in an around the world way). But, people can't afford to buy there, so that drives rent. I've been watching Starkville for the last couple years, it's one of the craziest, high-*** markets in MS. And as a parent with a kid renting in Starkville, I can tell you rent went up big this last year.

 

[johnson86-1]

If you want to pay rent for a house less than $1500 in the metro area, you may luck out in Pearl, Richland, out in the country areas of Rankin, or Jackson city limits into Byram.

Little 2/2 or 3/2 houses with one car garages in Barnett Bend easily go for 16-1800+. You are lucky to find apartments in the 39047 under 1200.

I don't see how young kids today are going to make it. My first studio apartment in the late 90s was about $450. Sure about 1/3 of my income went to housing back then but i could still live. Some kid would have to be bringing down 50K or more to be spending 1/3 of their income on housing these days.

That's what our fat, blotchy guv doesn't get. He's so worried about keeping the poors in their place and he doesn't even realize how badly the middle class is getting it these days.

What state policy do you want to help the middle class?

Hard to subsidize the middle class from the state level because there's so much of it. Outside of Madison, I don't know that a lot of cities in Mississippi are effectively trying to make housing unaffordable, which is a huge part of the problem with housing in most of the country. Even if they are, there's usually not a shortage of land where affordable housing can be built. That's going to be pretty specific to the Jackson metro area as far as being the only place with enough density and sprawl that they can really make it hard by pushing development out around an unsafe and hollowed out center.

We are doing better on licensing than most states. We could use school choice so families could look in cheaper neighborhoods without getting hammered by private school tuition. Income tax combined with a 7% sales tax is too much, but we're a poor state. While it would certainly help for taxes to be lower, we do need revenue. We don't impose a lot of ridiculous state level regulations that make growth hard; we're just stuck with federal stuff. I just don't see a lot of low hanging fruit outside of school choice, and that's not going to be free if we structure it to help the middle class avoid the bite of bad school districts.

 

[ETK99]

Home prices are "over-valued" by over 10% nationwide on a population-weighted average basis. Memphis is in the top 50 metro areas right now. Things should start to level off later this year, but another reason people aren't buying.

 

[patdog]

Surprise. When ownership costs go up because of interest rates, rental prices go up. There’s no reason to rent unless you can’t afford the down payment. I always laugh when people say it’s better to rent. No it’s not. Your landlord isn’t renting to you out of the goodness of his heart. He’s doing it because you’re paying more than it costs him to own.

 

[ETK99]

Surprise. When ownership costs go up because of interest rates, rental prices go up. There’s no reason to rent unless you can’t afford the down payment. I always laugh when people say it’s better to rent. No it’s not. Your landlord isn’t renting to you out of the goodness of his heart. He’s doing it because you’re paying more than it costs him to own.

We're sitting at a 30 year low in affordability. Funny thing is, the growth in purchase demand is for homes above $800K. With lack of inventory, people have no choice but to search the higher price points and those at the margin are priced out.

 

[CochiseCowbell]

 

[johnson86-1]

If you think $600 checks were bad, wait until you find out about PPP welfare.

You can search by ZIP here if you are curious https://projects.propublica.org/coronavirus/bailouts/

PPP was awful but it was justified by forcing a bunch of companies to shut down. That was the original sin that was just ridiculous. PPP was made worse by the fact that it had no connection to whether you shut down. If you really had to shut down, it didn't help you as it just covered payroll that you had to now maintain without revenue. If you weren't forced to shut down, you got to keep making money and then get paid a lot of money. That was mostly grift but there was a pandemic (even if our reaction was about as measured and responsible as if you'd per a 13 year old girl in charge of policy) and there was at least some argument that we needed to do something. The other rounds of stimulus and the "inflation reduction act" (ha) were just straight up grift with no excuse.

 

[johnson86-1]

Surprise. When ownership costs go up because of interest rates, rental prices go up. There’s no reason to rent unless you can’t afford the down payment. I always laugh when people say it’s better to rent. No it’s not. Your landlord isn’t renting to you out of the goodness of his heart. He’s doing it because you’re paying more than it costs him to own.

That is not true in a lot of places (most places?), at least for decent single family housing. Landlords are making a bet on appreciation and rent inflation usually to make it work. If you are landlord just buying at market rates, you're going to lose money for some amount of time. Obviously has taken very little time for any purchases from 2018 onward. I suspect people that have bought in the last year are going to find that it takes a good bit longer before their costs are less than the cost of rent. But that assumes new inventory coming on line and the FED doing its job and Congress and the president not continuing to randomly helicpoter in trillions of dollars into the economy from time to time.

 

[DoggieDaddy13]

Yeah, he’s doubled down, dems always love to spend, but that last guy really got the ball rolling downhill in the money printing department. That’s my gripe with the last guy.

The last guy cut taxes on the rich, let Congress give out a bunch of tax credits to everyone else during COVID - but didn't cut one 17n government program, much less deep six any.

Now the Dems are throwing even more money at everything to win the next election. And they just might do it.

Somebody's gonna pay at some point.

 

[DoggieDaddy13]

We're sitting at a 30 year low in affordability. Funny thing is, the growth in purchase demand is for homes above $800K. With lack of inventory, people have no choice but to search the higher price points and those at the margin are priced out.

I'm curious as to how many people are actually purchasing homes at over $800k now and how that compares to the rest of the populace.

 

[dorndawg]

I'm curious as to how many people are actually purchasing homes at over $800k now and how that compares to the rest of the populace.

There is far more demand for homes under 800k than at or over that amount. All you need to do is look at average sales Price by state. This data is a few months old, but zero states even average that amount and all but California are FAR from it. The U.S. median home price was $412,000 in September 2023.

Median Home Price By State

The median home price gives us an idea of what the typical home costs. It tells us that half of homes sold for more than that price and half sold for less. Combined with mortgage rates and other factors, the median home price also helps us understand how affordable it is to buy a home. The state

www.forbes.com

 

[aTotal360]

Rent is up because mortgages are up. Mortgages are up because we 17ed supply and demand up the poop shoot after the GFC and then went in raw dawg in COVID.

Yup. Rent is up because all the RE investors saw how much people are willing spend on rent. Trump allowed the 2-3% rates to hang around for too long. It made prices spike. And like you said, the supply chain wasn't ready either. Then COVID happened and it snowballed.

And more renters are entering the market because of our culture of not wanting to "live within your means". People aren't willing to save up for a downpayment. We didn't vacation, didn't buy BS, and put off having kids for years to make sure we had money for downpayment (and avoid PMI).

Now there are tons of RE investors that purchased rental properties at high prices and "high" rates (even though current rates are historically average). The only way to cover their nut is to charge high rent. And as soon as one unit gets a premium on rent, every other landlord around sees it and eventually everything is high.

IMO, inflation is the biggest problem. Everyone is missing 25% of their paycheck because groceries, gas and utilities are through the roof. And non-essential things like going out to eat or entertainment is even higher.

 

[jethreauxdawg]

And more renters are entering the market because of our culture of not wanting to "live within your means".

Yikes, personal responsibility? Oooh. I like blaming other people instead. They’re just greedy

 

[sandwolf.sixpack]

Rule of thumb for rent I heard a few years ago was $1 per sq ft per month. Not sure if that's the case anymore though

This would be about $1.40

I used to hear $1/ft 10 years ago, when it was considered really expensive if you paid $150/ft for a new house in Gluckstadt. Now those houses are going for $200+/foot. So $1.40/ft for rent is probably about right.

 

[IBleedMaroonDawg]

Yeah, he’s doubled down, dems always love to spend, but that last guy really got the ball rolling downhill in the money printing department. That’s my gripe with the last guy.

Now Biden is saying, we don't have the right numbers?

I have to agree with you, they all can spend money. It does not matter who is supposedly in charge. It took me almost 3 decades, but I finally figured that out.

 

[CoastTrash]

Nothing has more annoying today than being reminded of my employer receiving but not paying back a $200k+ PPP loan, since I know that we lost zero revenue from covid and I continued to work my *** off for the same 17 pay. I made a huge mistake by not being an owner.

 

[dog12]

I'm curious as to how many people are actually purchasing homes at over $800k now and how that compares to the rest of the populace.

I live in Loudoun County in Northern Virginia. If you want to buy a home around here for less than $800k, then you would likely be looking only at condos or townhouses. If you could find a SFH for less than $800k, then either something is wrong with that house or you'd be competing with multiple bidders. The real estate market around here is ridiculous.

 

[Boom Boom]

What state policy do you want to help the middle class?

Hard to subsidize the middle class from the state level because there's so much of it. Outside of Madison, I don't know that a lot of cities in Mississippi are effectively trying to make housing unaffordable, which is a huge part of the problem with housing in most of the country. Even if they are, there's usually not a shortage of land where affordable housing can be built. That's going to be pretty specific to the Jackson metro area as far as being the only place with enough density and sprawl that they can really make it hard by pushing development out around an unsafe and hollowed out center.

We are doing better on licensing than most states. We could use school choice so families could look in cheaper neighborhoods without getting hammered by private school tuition. Income tax combined with a 7% sales tax is too much, but we're a poor state. While it would certainly help for taxes to be lower, we do need revenue. We don't impose a lot of ridiculous state level regulations that make growth hard; we're just stuck with federal stuff. I just don't see a lot of low hanging fruit outside of school choice, and that's not going to be free if we structure it to help the middle class avoid the bite of bad school districts.

What I see on the coast is small municipalities in bed with large builders (who get a pass on every code or regulation they want). The small builders got pushed out amd aren't looking to come back. And the large builders are building those cookie cutter small homes with higher end finishes all crammed next to each other. They aren't good value, so it's not helping.

 

[johnson86-1]

What I see on the coast is small municipalities in bed with large builders (who get a pass on every code or regulation they want). The small builders got pushed out amd aren't looking to come back. And the large builders are building those cookie cutter small homes with higher end finishes all crammed next to each other. They aren't good value, so it's not helping.

Not sure how unique that is for the coast although I don't know that I've seen it worse anywhere else. But again, I don't know how much the state can help with that. I don't think that's big time money changing hands. I think it's donations and "soft" corruption and maybe some small time palm greasing that's hard to stop.

But it's also hard to draw the line between enforcing good construction and not driving up costs. If they would just require those cookie cutter neighborhoods have garages that people can park in, that would stop some of them from turning into trash neighborhoods in ten years that are a drain on the city. But that drives cost per finished square foot up obviously.

Of course it would help cities and counties if they would make infill development easier where the city/county didn't pick up new infrastructure to maintain rather than picking up extra tax revenue that uses existing infrastructure. But that's sort of unrelated except it would help with the tax burden.

 

[Boom Boom]

We're sitting at a 30 year low in affordability. Funny thing is, the growth in purchase demand is for homes above $800K. With lack of inventory, people have no choice but to search the higher price points and those at the margin are priced out.

Schooling. It's a poker term. Refers to multiple dumb players all acting dumb in their own different way. The cumulative effect is the odds for the smart player change. Betting top pair becomes a poor bet when you've got one guy chasing a straight, another chasing a different one, two chasing a flush, one with middle pair, and another with a higher hole card.

Here, I'm referring to that there's just so many more people. When a certain amount of them do the "dumb" thing and pay "too much" for a house....it affects everyone else. When there's 10 houses in an area and 20 buyers, the price is set by the 10 willing to pay whatever it takes, not the 10 who are smart and won't overpay.

Plus, I remember laughing at what people were paying for houses a few years ago. They're the ones laughing now.