October 4, 2006
Behind this trend is a basic economic fact about homeownership vs. renting, explained Delores Conway of USC's Lusk Center for Real Estate. While house payments may start out higher than rent payments, they can be fixed for 30 years or longer. And even adjustable mortgage payments have lifetime caps. But Orange County rents can increase annually, limited only by market forces. "Renters don't have much protection. They don't have fixed-rate loans that can lower their housing costs over time," Conway said. "So they are much more vulnerable."