Buying Still Cheaper than Renting
In 2011 I wrote about the advantage of buying a home over renting one. It was based on a report of the greater Phoenix area prepared by local analyst Fletcher Wilcox of Grand Canyon Title in 2010. It analyzed whether it was cheaper to pay rent or pay a mortgage on a single family home, and buying came out way ahead. But is that still the case with the increases in the price of homes since that time? Both Zillow and Trulia have done their own rent v. buy studies of cities around the country. Last year Zillow calculated that for renters, buying a home pays off after three years on average nationwide. This year Trulia found that buying a home is cheaper than renting in all of the 100 largest metro areas. A year ago, Trulia determined that across the country, buying was 46% cheaper than renting. In the 2013 Winter Rent or Buy Report, the finding is that it’s 44% cheaper to buy versus rent. (http://www.forbes.com/sites/trulia/2013/03/20/rentvsbuy-winter2013). The small difference over the year is attributable to the falling mortgage rates which offset most of the price increases. Specifically as to the metropolitan Phoenix area, Trulia estimated that buying is about 5 to 20% cheaper compared with renting. These monetary factors are prompting many renters to consider home ownership. Plus there have always been non-financial reasons for buying a home. You will own something that you can improve and enjoy any way you want. And based on history, it should appreciate and turn into an important asset over time. So why pay rent when its cheaper to own? If you would like to get out of a rental and into your own home in the greater Phoenix/Scottsdale area let me know.
N. Mark Kramoltz © 2013