Is it Better to Buy or Rent a Home?
Bloomberg Business published a study by Trulia, an on-line residential real estate site, indicating
”low interest rates and home prices knocked down from the housing crisis have made buying a much better deal than renting in virtually all U.S. markets.”
“Trulia compared the median costs of buying and renting and found that in 98 out of the top 100 metropolitan areas, it is better to buy.”
“But good deals notwithstanding, buying is an option only for those who earn enough to afford the homes available on the market.”
“Across the U.S., the report said, it’s 23 percent cheaper for a young household to buy a home than to rent one; however, the advantage to buying will likely disappear once mortgage rates finally rise.”
Even though the economics may be favorable, before you buy be sure of the following: 1) you can afford the home. I recommend that you have a 20% down payment, that the monthly mortgage is no more than 30% of your net spendable income, and that you have 3 months living expenses saved to cover maintenance and repairs; and 2) be sure your employment opportunities are solid.
Don’t buy a home just because it is a lower cost of living; buy only if the Lord is directing you to make that choice. Renting is not a bad option, while it is not a great investment, it does give you more freedom and flexibility.
Originally posted on Crown.