Renting could be pricier than buying

Mortgage rates continue to drop, making home buying more affordable. Home prices also continue to decline, as foreclosed properties clog up the market and increase supply relative to demand. Therefore, a first-time buyer with no property to sell first will have a selection of drastically discounted houses to choose from, which could actually be cheaper to purchase than continuing to rent an apartment or home.

Paul Diggle, housing economist at Capital Economics, told MSNBC home prices have declined 33 percent since the onset of the housing crisis, and mortgage rates have declined 15 percent. The median monthly mortgage payment has dropped in response, nearing the same price as the median monthly rent check. If mortgage rates continue to drop, and rent keeps increasing due to the high demand, homeownership could become cheaper than renting.

Some of the most affordable properties on the market are foreclosed homes and there is a vast inventory for homebuyers to choose from. RealtyTrac reported 31 percent of home sales across the United States are of homes in pre-foreclosure or already bank-owned. To take advantage of the affordable housing options, Fox Business recommends buyers follow a few tips.

For example, when a homeowner willingly turns their home over to the bank because they cannot pay off their mortgage, the house is put up for sale at an auction. Based on who comes to the auction can determine how low of a price the house will sell for, creating an opportunity for significant savings, the source reported.

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