In today's market, many people are left wondering whether they are choosing the smartest investment when it comes to either renting or buying a home. National averages show that it is cheaper to buy than to rent; however, this is not true for all major metro cities in the U.S. For example, it is 70% cheaper to buy than rent in Detroit, but only 28% cheaper to buy than rent in San Francisco. In Houston, we are looking at 51% in the buy-versus-rent ratio, which still leans heavily toward buying as opposed to renting.
If this is true, then why aren't more people buying? We are still recovering from the recession, and although Houston wasn't hit as hard as other cities, we are still not seeing the amount of buyers that we once were before the recession. People are afraid to buy because they think they cannot afford a mortgage. What's interesting about this statistic is that the cost to rent per month is significantly higher than a mortgage would be. For example, if you are renting a house for $1700 a month, you will likely pay around $1400 a month on a mortgage payment for the same house.
Another reason why people are afraid to buy is that the downpayment on a house is pricey and can take few years to save up for. Younger buyers who are in debt from expenses such as students loans may not be able to save as easily for a downpayment on a house and may end up renting for many more years because of it. It is easier on the pockets to pay a few hundred dollars more a month on rent than come up with $5,000 for a downpayment on a house.
We are still recovering from an economic recession, where thousands of people are still out of work or are trying to pick themselves up off the ground from economic hardship, which makes it more difficult to save up to buy a house. Hopefully we will begin to see a turnaround in the next few years.
If you or someone you know has a question about real estate, please contact me using the information provided below.
Arthur Confait
Email: arthurconfait@gmail.com
Website: CLICK HERE
If this is true, then why aren't more people buying? We are still recovering from the recession, and although Houston wasn't hit as hard as other cities, we are still not seeing the amount of buyers that we once were before the recession. People are afraid to buy because they think they cannot afford a mortgage. What's interesting about this statistic is that the cost to rent per month is significantly higher than a mortgage would be. For example, if you are renting a house for $1700 a month, you will likely pay around $1400 a month on a mortgage payment for the same house.
Another reason why people are afraid to buy is that the downpayment on a house is pricey and can take few years to save up for. Younger buyers who are in debt from expenses such as students loans may not be able to save as easily for a downpayment on a house and may end up renting for many more years because of it. It is easier on the pockets to pay a few hundred dollars more a month on rent than come up with $5,000 for a downpayment on a house.
We are still recovering from an economic recession, where thousands of people are still out of work or are trying to pick themselves up off the ground from economic hardship, which makes it more difficult to save up to buy a house. Hopefully we will begin to see a turnaround in the next few years.
If you or someone you know has a question about real estate, please contact me using the information provided below.
Arthur Confait
Email: arthurconfait@gmail.com
Website: CLICK HERE
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