To Buy or To Rent?

12 05 2011

As home prices fall and rents rise, home buyers are finding themselves in the position of having a few more options. In nearly 4 out of 5 major US cities, it’s less expensive to buy a home than to rent. According to online real estate resource Trulia, that is up from 72 percent of cities last quarter.  Could we be seeing a shift in purchasing power?

The housing market has taken a tragic beating over the last few years and this has prompted a shift from buying to renting. Although, the housing market could still see an influx of foreclosures, this potentially presents unique buying opportunities for those who are trying to decide whether they should buy or rent a home. After all, housing prices haven’t been this low since the 1970s and the last time we saw these low mortgage interest rates was in 1972. These factors could significantly increase affordability for a growing number of prospective home buyers.

Despite prevailing skepticism, the housing market is showing signs of healthy recovery and positive change is on the horizon. In March 2010 the home sales index was up 5.1 percent, as more Americans signed contracts to purchase homes, according to the National Association of Realtors. This could be a signal that more house hunters are feeling confident in snatching up those bargains.

“As we head into the summer buying season, those looking to buy a home should be encouraged by improvements in the market and feel optimistic about their chances of finding an affordable home, much more so than in previous years, “ said Ken Shuman, head of communications at Trulia, in a press release.

Consider a few of these factors – if you have a good employment history with a steady income, have the cash reserves or options to provide a down payment (3.5% – 20% of the purchase price), and you are current on all debts, there may never be a better time to purchase a home.  Renting provides short term relief, but truthfully you are paying for someone else’s mortgage when you could be building your own investment.  In many instances, the monthly cost of renting may even exceed a typical mortgage payment.

Do yourself a favor and investigate your options.  The American Dream of homeownership can be yours too.

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