Insanely low mortgage rates=insanely low mortgage payments. Buying vs. Renting revisited

Mortgage rates are the lowest they have been since I began in this industry in 2003. Incredible market volatility and a global financial system teetering on the edge of disaster have made institutional money flow into the relative safety of mortgage lending. With more money supply the demand naturally decreases and the rates are so low its silly.

Today a 30 year fixed could be had at 4.000% at par (no points paid for the rate).

Mortgage payments by loan size at that interest rate:

$300,000 = $1432

$400,000 = $1909

$500,000 = $2387

$650,000 = $3103

If you want to pay the property off in 15 years the mortgage rates are stupid low. 3.25% is par. Payments as follows:

$300,000 = $2108

$400,000 = $2810

$500,000 = $3513

$650,000 = $4567

This means that in LA, the costs of buying vs. renting are becoming close to even in many neighborhoods. Check out this slick NY times calculator for detailed info about that equation. This is the perfect storm for the savvy real estate buyer. A very soft real estate market coupled with all time low interest rates.