Fixed Mort?gage Rates Make Homeown?er?ship Cheaper than Rent?ing in Most of U.S.
August 23, 2011According to a report from CNN Money, a service of CNN, Fortune and Money magazines, it?s now less expensive to purchase a home than it is to rent one in the majority of U.S. cities. Based on statistics cited in the article, renting was more expensive than buying in 74 percent of the nation?s largest metropolitan cities in the month of July. Renting was less expensive in only 12 percent of cities, with costs evening out in the remaining 14 percent.
Rock-bottom home prices and plummeting fixed mortgage rates have combined with tax incentives to tip the scale in favor of homeownership, though many continue to rent for one reason or another.
Should you rent or buy?
If you?re not sure whether you should rent or buy, you should consider the following before contacting a local mortgage lender:
Length of residence ? If you don?t plan to stay in the property for at least seven years, you should probably rent rather than buy. Transactional costs can make home buying expensive, and you need years to make the expenses pay off. Additionally, with buyer activity scarce in today?s real estate market, you may have trouble finding interested parties if you do decide to sell.
Job security ? If you think you may be forced to switch jobs anytime soon, homeownership is not a good choice. Employment irregularities can prevent you from getting approved for a loan and compromise your ability to afford your monthly mortgage payments. Additionally, if you?re locked in a mortgage, you won?t be able to relocate if a prime position opens up at a location several miles away.
