Home Sweet Home Or Apartment?

This entry was posted in Tips for Buyers on June 16, 2012

The decision whether to rent or purchase a home is influenced by a host of personal factors that are viewed against a background of shifting financial and economic realities. Up to this point, a good argument could be made that renting was more of a bargain than buying. However, as a general matter, since the market decline, home prices have fallen by about a third, mortgage rates have plunged to new lows, and rents have increased by about 15 percent. Currently, the median monthly mortgage payment of $700 is about on par with the median monthly rent check. While a complete analysis of individual buy/rent decisions factors in taxes, maintenance, insurance, etc., a new look may be in order.
HINT: One guideline concerning the buy/rent decision involves dividing the median list price by the median rent of similar properties. If the price/rent ratio is over 20, renting is likely a better option; if it’s under 15, strongly consider buying.