BUYING A HOME IS STILL BETTER THAN RENTING – BUT FIRST YOU HAVE TO FIND ONE!
Despite the fact that house prices continue to soar and are still rising faster than salaries are, renting still costs more overall.
However, sales of homes are actually down. But why is this?
Well, the problem is the lower end of the market. In other words, the end that most people need to look in and definitely the price range that a first time buyer would be likely to start in.
In April, the percentage of available homes to buy was down by 9%. As you might expect, in this pressured climate, the amount of time it took to sell the resultant properties fell to only 29 days – the lowest ever recorded by the National Association of Realtors.
The figures for homes being listed for sale rallied a little over the spring period, but they were snapped up even faster still.
The bad news for anyone hoping to get their feet on the first rung of the property ladder is that they are the ones who will be most likely to suffer from this trend.
The lower end of the market is the worst affected. Anyone looking for a modestly priced home (under $100,000) is going to be in major competition because since last year, the number of available properties is down by 17%.
And the next rung up doesn’t fare awfully well either, with homes priced under $250,000 being down by 6% as available to buy.
This may make buyers, particularly first timers or those of modest means, rather frustrated to keep hearing about how cheap it is to buy compared to renting!
It is still cheaper to buy than it is to rent – but a lot here also depends on which house price bracket you are looking at and also, where in the country you are.
As in all things, there are winners and losers in the rent versus buying stakes. If you live in Baton Rouge, Louisiana then it is a whopping 50% cheaper for you to buy your own home than it is to continue to rent.
However, switch that to San Jose in California and the difference is marginal – it is only cheaper by 3.5%. These figures are based on a mortgage of thirty years fixed and a 20% deposit.
Your decision to buy is still a highly personal one and based on more things than price alone – but it is a factor that you can ill afford to ignore unfortunately.
Taking advantage of the savings on offer provided by buying is great – if you can actually find a place to buy in the first place!