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Renting vs Owning in 2016

January 22, 2016 by Eric Lowry

Renting vs Owning in 2016Renting vs Owning in 2016

Trying to decide between buying a home or renting another year? Recent data might help you make up your mind.

There are currently low rental vacancy levels and a lack of new rental construction, which are driving rents up significantly. Rents are expected to outpace home price appreciation in the upcoming year. What does that mean for you? It means that renting is going to be more expensive than owning a home.

Average Rent in the USA recent Wall Street Journal article reports that “rents rose faster last year than at any time since 2007”. On average rents rose by 4.6% in 2015; when over the previous 15 years they had only risen an average of 2.7% annually. Zillow‘s 2016 Housing Market Predictions state that “rising rents won’t let up in 2016, and will continue to set new records. [2016] will bring the least affordable rents ever.”

Many people choose to rent just because they aren’t comfortable taking on the obligation of a home mortgage. However, unless you are living with family or friends rent free, you are paying a mortgage – either your own or your landlord’s. Wouldn’t you much rather put that money back into your own pocket? A home mortgage is like a forced savings which builds you equity in your home that you can use later on in life. If you are renting, you are only building your landlord’s equity.

Right now interest rates are at historic lows, but they are projected to increase steadily throughout 2016. Your window of opportunity to get a low interest home loan is closing. An increase in mortgage rates of 0.5% is equal to a 10% increase in home prices and affordability, which significantly increases your monthly payment. So the question you should ask yourself is, can you really afford to keep renting?

Questions about buying a house? Contact The Lowry Team today at 513-874-1830.

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The Lowry Team – Keller Williams Realty is an award winning, full service real estate firm specializing in West Chester, Liberty Township, Mason, Monroe and the Northern Suburbs of Cincinnati. The Lowry Team is “Different By Design”… taking a team approach to home buying and selling. The Lowry Team consists of members that are focused on areas of specialization including Listing Specialists, Buyer Specialists, Transaction/Listing Coordinator, Inside Sales Associate and a Marketing Director.

Don’t Hire an Agent…Hire a Team.  The Lowry Team.

Buyers and Sellers can reach The Lowry Team Keller Williams at 513-874-1830.

Other Articles You May Be Interested In:

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Where are interest rates headed?

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Filed Under: Eric Lowry's Articles, First-time Homebuyer Tagged With: Buying a house in 2016, buying your first house in Mason, buying your first house in West Chester, Can You Afford To Keep Renting?, cost of renting, Houses for sale in Fairfield, Houses for sale in Mason, Houses for sale in West Chester Ohio, Keller Williams Realty West Chester Ohio, LowryTeam.com, Renting vs Buying, Renting vs Buying in 2016, Renting vs Owning in 2016, The Lowry Team, West Chester Ohio Real Estate Team

First Time Homebuyer Series: Can You Afford To Keep Renting?

September 23, 2013 by Eric Lowry Leave a Comment

Can You Really Afford to Keep Renting?
First_Time_Homebuyer_Renting_vs_Buying

With the rising cost of renting, many people are considering buying a home. However, some are worried about affordability. If you are paying rent, you can afford to buy a home.

Consider this example:

Buying A Home:

Mary’s $900 mortgage payment includes $700 of interest. Her total annual house payments are $10,800. At the end of the year, $8,400 of that is tax deductible ($700 x 12months). She is in the 28% tax bracket, so her savings are $2,352. Her actual housing cost for the year is $8,448.

Renting An Apartment:
Joe believes he can’t afford to buy. He pays $800 in rent each month which makes Joe’s housing costs for the year $9,600. He thinks he is saving money by renting, but he is actually spending $1,150 more than Mary, and he isn’t building any equity.

Interest rates have decreased in the last 10-14 days and are now once again right around 4.50%.  Most experts do not expect mortgage interest rates to stay this low, with home loan experts predicting a rise to 5.00%   A raise in mortgage rates of .50% is equal to a 10% increase in home prices and affordability.

So the question you should ask yourself is: Can You Really Afford to Keep Renting?

Ready to start searching for your first home?  Start your home search here:  www.LowryTeam.com

Here are some quick searches to get you started:

West Chester Ohio Homes For Sale Under $200,000

Liberty Township Ohio Homes For Sale Under $200,000

Mason Ohio Homes For Sale Under $200,000

Monroe Ohio Homes For Sale Under $200,000

Fairfield Township Ohio Homes For Sale Under $200,000

Fairfield Ohio Homes For Sale Under $200,000

Other articles that may interest you:

Thinking Of Buying A Home – You Should Wait

Did You Miss Out On The Buyers Market?

Filed Under: Buyers, Eric Lowry's Articles, First-time Homebuyer Tagged With: Buying A Home, Can You Afford To Keep Renting?, Eric Lowry, First Time Homebuyer Series, First Time Homebuyer Series: Can You Afford To Keep Renting?, First Time homebuyers, Renting vs Buying, Search Homes For Sale, Search The MLS, www.LowryTeam.com

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