Rent vs Buy at the Tipping Point, 65 Percent into the Buy Zone

Rent vs Buy at the Tipping Point, 65 Percent into the Buy Zone.

In several instances recently I’ve helped put folks into a home of their own for far less in monthly mortgage payments, than the cost of rental homes they were looking at or living in. In each case the homes they purchased were far nicer than the rental homes, and in more than one instance the buyers realized instant equity.

I can’t stress this enough. If you are currently renting, consider having a chat with me or a qualified lender about buying a home. Most people are pleasantly surprised that they can actually own a home now or sometime in the near future. If credit is your issue, most of the mortgage lenders I work with will help you through credit repair at no charge. Many potential home buyers are unaware that there are still down payment assistance programs available with highly favorable terms, no repayment required, and generous criteria.

The statistics say it all. Our real estate market is steadfastly in the Buy Zone!

The U.S. is in buy territory, with 65 percent of cities measured in the recent Florida Atlantic University (FAU) and Florida International University (FIU) Buy vs. Rent Index posting more favorable outcomes when buying a home than renting one—implying that homeownership is, on average, a better vehicle for wealth creation. The cities in buy territory include Atlanta, Ga.; Chicago, Ill.; Cleveland, Ohio; Honolulu, Hawaii; Los Angeles, Calif.; Minneapolis, Minn.; Philadelphia, Pa.; and St. Louis, Mo.

Housing in these and other areas, however, is becoming less within reach, as record-high rents drive record-high prices, says FAU Professor Ken Johnson, one of the authors of the Index and a real estate economist. While the market overall reads stable, costly prices and rents indicate an impending—and potentially widespread—lack of affordability.

“With both significant increases in rents and property prices, the issue of housing affordability is quickly becoming a major concern again across many areas of the country,” Johnson says. “Given the country’s experience during the run-up to the housing crash in 2008, it’s doubtful that we will again respond to the housing affordability issue with easy and flexible access to credit.”

Some cities, still, are in rent territory, according to the Index. These include Dallas, Texas; Denver, Colo.; and Houston, Texas, though all three show stalled out rents in relation to prices. Importantly, and in addition, rents in all of the cities analyzed in the Index are slowing.

Over the last three years, the rate of rent increases has been matched by the rate of price increases. This suggests stability in the housing market nationwide, says FIU Assistant Professor Eli Beracha, one of the authors of the Index.

“Increasing employment and increasing income combine with rising rents to provide a sound economic environment for the country’s housing markets, in general,” Beracha says.

For more information, Call or Text: 602-999-0952
eMail: golfarizona@cox.net
Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management

Source: Florida Atlantic University (FAU) Reprinted with permission from RISMedia. ©2016. All rights reserved.

There are still down payment assistance programs available in Maricopa and Pinal Counties. These are grants, NO repayment necessary. Call us for details: 602-999-0952

We also have options to help with your closing costs. See the links below or feel free to call or email for additional information: 602-999-0952 / golfarizona@cox.net