Renting or Buying
This afternoon, I was doing an open house when a young couple came into the townhouse. They identified themselves as friends and that the young woman was going to open houses today. At that point, she indicated that she wasn’t sure whether she was going to buy a home or rent. They went thru the townhouse and were very impressed with it.
Later, I received an email seeking additional information about the house. I responded with the info and then went into a discussion about the merits of buying now as opposed to renting. Renting is obviously an option that many people are contemplating as a result of the economy. Homes that I have had on the market for sale are now being listed as “for rent” and are getting strong response.
However, if the economy is not a problem for you, then buying deserves strong consideration for many reasons:
1) Today, sellers are much more realistic in their pricing. If they aren’t, their homes are going to continue adding “days on the market” in the MLS. Plus, the seller is going to continue paying a mortgage placing more financial strain on the seller. While the depressed prices for homes will not be reversed for a couple of years, it still is a great time to buy a home and take advantage of the current market.
2) Today’s interest rates are historically low. But, if you listen to the lenders, they expect the rates will soon be increased. So, today’s interest rates are strong incentives to buy now.
3) There has been considerable discussion as a result of financial crisis that the country is facing that one avenue for increasing revenues is to eliminate the mortgage interest deductions on homes over $500,000. While that is a price that is considerably above the average market price, it still is another reason to consider buying now and not waiting for another day.
4) Another discussion is that the low down payment requirements should be stopped so that “people have more skin in the game.” Conceivably, downpayment requirements could go up to 20% if you list to some of the pundits. While this could have a very bad effect on the real estate market and hopefully will not happen, it could.
5) Getting into the market as a buyer today would probably allow you to acquire a home at a monthly payment that could be cheaper than rent. If you are on the fence regarding purchasing or renting a home, please talk to a mortgage lender.
6) Finally, if you rent, what do you have? RENT RECEIPTS.
