Can home values fall below rental rates in a very populated area like orange county, ca? ?

home values have fallen considerable down in my area but rents are still very high because its a densely populated area so demand is high. is it likely that values will fall below the level of monthly rent equal to that of a home payment. Can home values fall below rental rates in a very populated area like orange county, ca? ?
It is possible due to supply and demand.





If the demand for rentals increases disproportionately to the supply of available rental homes, rental rates will shoot up.





If property values continue to drop, then the corresponding mortgage payments for those homes will drop.





At some point, it will be possible for the monthly rental rates to be higher than what a mortgage payment would be on the home.





Keep in mind that more people will be renting now since they can not obtain mortgage financing due to there being limited subprime loans and stated income loans available and more people with damaged credit due to the housing crisis.Can home values fall below rental rates in a very populated area like orange county, ca? ?
Yes, it is possible.





The situation right now is that a lot of homeowners are losing their houses to foreclosure.





These people need a place to rent... so now the demand on rental properties are high and landlords know this... and that means that they can charge more in rent when sooner or later they will find somebody willing to pay it.





Even so House prices and mortgage rates are falling fewer people are able to come up with the down payment and the high credit score needed to qualify for a loan.





So we essentially have a huge market filled with renters with bad credit due to foreclosure and very few people left that can get a mortgage for a house even if that mortgage payment would be less than the rent for that house.





It doesn't matter that you can afford to pay rent.


What matters is to have the ability to get the financing for a house...
I've had the experience of moving from a 2 bedroom apartment to a 3 bedroom house and paying about the same every month for mortgage, condo fees, tax, and utilities as I was paying in rent before. So I'm sure it can happen. (Especially if the demand for rental housing is high because of all this mortgage trouble making it hard to get a loan.)
When rental cost outweighs mortgage cost then buy the house and pay your own mortgage rather than your landlord's....blind freddy can see that





ergo rents will never be more expensive than mortgages. you are seeing the bottom of the market - in this area only, of course.
If home payments ever fall that low, all the renters like myself will try to buy then, thus driving the prices back up. I see rents always being a bit cheaper than payments.

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