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2012-08-07 08:55:12
If you are renting, should you buy?

For renters, buying a home pays off after three years on average

A new analysis by real estate website Zillow shows that, on average, a renter thinking about buying a home will reach what it calls the “break-even horizon,” after just three years.  The break-even horizon compares what it would cost to buy or rent the same home in a number of U.S. markets over time.

Some things to note:

  • The analysis takes into account a host of factors potential buyers should think about when considering a home purchase, including the down payment, mortgage and rental payments, buying and selling costs, property taxes, utilities, maintenance costs, and tax deductions.  The analysis adjusts for inflation and forecasts home value and rental price appreciation.
  • Zillow said that the data should help homeowners get a rough and immediate sense of whether buying makes sense in a particular area in relation to their financial situation.
  • Additionally, many analysts believe that a housing bottom has been reached, which may help renters determine if now is the right time to buy. However, analysts also say they are not expecting home prices to return to the same levels as during the real estate bubble.
  • There is also some concern about the strength of the housing recovery, with home sales slowing in June as inventory remained tight and buyers paid higher prices. At the same time, rents are rising, housing affordability is at record levels, and mortgage interest rates remain very low.  These factors are prompting many renters to consider homeownership.

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Bryan & Allison Devore

Prudential California Realty

(760) 908-3838

North San Diego County and Carlsbad Real Estate

 

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