Buying a Home is Now Cheaper than Renting!
Although the rental market is strong all year long, Springtime has arrived, marking the beginning of the rental season. It is this time of year that the inventory increases and is generally matched by consumer demand. The Southern Maryland area has held a very consistent rental market, in terms of statistics, for the past several years. However, with home prices where they are, compared to the growing cost of renting, home ownership proves to be the best bet for your wallet.
In fact, Trulia released a report on Rent Vs Buy, measuring costs in the top 100 metropolitan markets, and explains that the cost of home ownership remains cheaper than renting by an average of 38%! To put that into perspective, a $1500 a month payment at 3.75% interest could get you a home loan around $240,000.
The other interesting findings in the report include:
- Even though prices increased sharply in many markets over the past year, low mortgage rates have kept home ownership from becoming more expensive than renting.
- Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.
- Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.
Buying a home now makes sense. You can lock in a mortgage payment before home prices and mortgage rates rise as experts expect they will. If you rent, your housing expense will only continue to increase.
Additionally, while we are still finding some mortgage companies continue to maintain a tight control over credit requirements, others are offering programs more consistent with the kinds of credit the average American is maintaining. You can now get an FHA or VA loan with a credit score as low as 580. This is huge news as we move into the renting and buying season, as many renters will now have options they never knew existed to them. For more information, on this program, call DeHanas Real Estate Services at 301-870-1717.
