As the economy steadily improves, owning a home is once again
proving to be a more affordable option than renting in Americas 100
largest metropolitan areas. There are three main components that
that sway people to buy rather than rent. The first being favorable
mortgage rates, next is tax deductions and the third being time
horizon. Interestingly enough, owning a home is cheaper by a very
wide margin. In Boston, for example, it was recently released in a
past blog that the city ranked as #1 Nationwide for
investors looking to purchase property in so-called ‘College
towns or cities’. This is essentially because here in Boston it
makes much more logical sense to purchase property than to rent as
the difference between the rent and mortgage rates for similar
properties is 248.7%.
Percentages of course vary from location to location but studies
have shown that buying a home in places such as Detroit is as much
as 70% cheaper than renting whereas in San Francisco there is a 28%
separation. As rent is so high in California, the monthly dollar
savings can be as high as $899 per month. These aforementioned
figures assume that the home is sold after seven years and includes
closing costs, maintenance, insurance, property taxes and other
necessary costs. Point being, if the above assumptions change the
equation changes as well.
At this point in time, because of rising rental costs and
incredibly low interest rates, buying a home is simply a much wiser
choice. With the economy steadily improving there is the undeniable
hope that home values will continue to be on the up as they have
proven to be thus far throughout 2012.
More Information: Mercury News