Friday Five: The Return of Home Ownership

Low interest rates and rising rents make home ownership more attractive than renting.

New indicators suggest we might be on the verge of a housing rebound this year. Between falling mortgage interest rates, affordable home prices, and climbing rents, buying a home looks like a smart investment. Plus, property taxes are beginning to ease for the first time since the start of the recession. Read about these trends and other top housing headlines in this week’s Friday Five.

Bloomberg: Mortgages Bring Record Savings Over U.S. Rents

The chart depicts the difference between after-tax mortgage payments and rents as a percentage of disposable income. Rents averaged 14.9% more than home-loan payments during the last three months of 2011. The gap widened from the third quarter by 8.1 points, and rentals were more costly for the fifth consecutive quarter.

Boston Herald: Rising Rents Could Signal Housing Market Strength

Home prices are tumbling to fresh lows, but new data show the rental market is on an upswing, an early indicator that housing may be headed into recovery. Rents are increasing because the foreclosure crisis has created a steady supply of renters in recent years and because of the nascent jobs recovery. Rising rents make home ownership even more affordable.

USA Today: Property Tax Collections to Start Downward Trend

More than five years after real estate prices began to tumble, Americans are finally starting to get property tax breaks on their devalued homes, a USA Today analysis finds. If the downward trend continues, property taxes may actually bring in fewer dollars this year than last even before adjusting for inflation. That hasn’t happened since the Great Depression.

CBS News: Sector Snap: Home Improvement Hits Multiyear Highs

Shares of home-improvement companies Home Depot Inc. and Lowe’s Cos., as well as those of paint maker Sherwin-Williams Co., all reached multiyear highs on Monday after an analyst said he sees improvements at all three companies. Late last month, the NATIONAL ASSOCIATION OF REALTORS® reported that the number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.

Miami Herald: Pay Up is FHA’s New Message

If you’re considering buying a house with an FHA mortgage and expect the seller to help out with your closing costs, here’s a heads-up: FHA plans to impose significant restrictions on the amount of money sellers can contribute at settlements in the near future. FHA also will be raising its mortgage insurance premiums during the coming weeks, increasing charges for new purchasers across the board.