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.
