Renting vs. Buying

Q:  Buying or renting – which is best?
A:  
Sometimes I am asked if it would be a good idea to rent instead of buy as the market levels off.  A recently published National Association of Realtors brochure gives some interesting stats: 

Over the past decade, the cost of rental housing in the United States has increased an average of 3% per year.  That cost is now moving towards 4.5%.
In contrast, a $210,000 home purchased today with a down payment of $10,000 and a 30-year fixed rate mortgage at 6.5% would yield a net appreciation of $138,521 after 10 years, assuming an historic 4.5% annual appreciation rate.  CA stats are even better—see back article.
If you want to accumulate wealth, then owning a home is probably your best choice, even in this market.  

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s