An increasing number of renters in Nashville, Tennessee, are looking into becoming buyers once again, as average rents in the city hit an all-time high of $816 per month at the end of June.
In light of the recent foreclosure crisis, rising rents were expected. However, with the median sales price of homes in Nashville, Tennessee, also rising substantially this year (to an average $182,000 in June), many renters are feeling shocked and upset that rents are continuing to spiral upwards.
Rental rates in Nashville jumped by 3.3% during the period from April to June, compared to January to March of this year, following a 12-month period over 2011 in which rents stayed more or less flat at around $790 a month.
Such is the rise in rental prices that many Nashville renters are now looking into buying homes instead, in order to get away from what they believe are “unscrupulous landlords” who are taking advantage of renters having difficulty obtaining credit.
Doug Walker, Vice President at Churchill Mortgage in Nashville, said that he was being overwhelmed with new inquiries from first time buyers looking at the maths of renting vs. buying a home.
For now though, it turns out that renting remains a cheaper option than buying – at least, for the time being. Moody’s Analytics pointed out that from studying real estate data in the Greater Nashville area from January to March, mortgage prices are still slightly more expensive than rental payments. However, with rents showing no signs of slowing down, things might not always be this way. Moody’s pointed out that this was likely because Nashville hadn’t suffered as badly in the foreclosure crisis as other parts of the country.
Alex Mirron, an economist at Moody’s, said that the current state of affairs was a reflection of what home prices have done in Nashville over the last few years. They’ve fallen considerably, but not quite so much as hard hit areas like California, Florida and Nevada. Even so, he predicted that if rents continue to rise as expected, Nashville can expect to see a lot of renewed interest in buying from those who currently rent.
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