Every potential home buyer has to stop for at least a moment and consider this question. Today, we want to look at one of the many financial reasons to buy instead of rent: the housing expense moving forward.
According to the latest Existing Home Sales Report from the National Association of Realtors, the median sales price of a home in the U.S. is $184,300. The mortgage payment (principal & interest) on that purchase would be $661.89 assuming a 20% down payment and a 3.5% mortgage interest rate. Currently, the median asking rent in the U.S. according to the Census Bureau is $717 a month.
We realize that the two payments do not necessarily reflect the housing cost on a similar residence. However, that is not the point of the post. All we are saying is that the monthly housing expense on a median price home is $661.89 and the median rent is $717. We now want to discuss what will happen to these costs over time.
The principal and interest portion of the mortgage payment is locked in for the next 30 years. We know real estate taxes may be included in the payment and will increase to some degree over that time. We also acknowledge that the homeowner will have occasion to spend money on repairs. They also receive many tax advantages as a homeowner.
However, the actual monthly housing expense remains the same for the next 30 years.
Now, let’s look at what happens to a rent payment. The best thing to do to predict the future is to study the past. Here is a graph of the median asking rent since 1988 based on Census Bureau data:
We believe rents will follow their historically pattern and increase dramatically over the next 30 years. Buyers have a choice: either lock in your housing expense or deal with the uncertainty of rental increases.
— Reposted with permission of Keeping Current Matters
Thank you for visiting the blog site of the Staten Island Board of REALTORS® (SIBOR)
The Staten Island Board of REALTORS® (SIBOR) is the largest not-for-profit trade association inStaten Island, N.Y.
SIBOR exists to enhance the ability and opportunity of its members to conduct their business successfully and ethically; and to promote the preservation of the public’s right to own, transfer and use real property.
Comprised of over 1,600 members, SIBOR serves real estate agents, brokers and affiliated professionals throughout the borough and surrounding areas.
SIBOR is the provider of the Staten Island Multiple Listing Service Inc. (SIMLS),which works as a clearinghouse through which more than 250 local real estate firms exchange information on properties they have listed for sale. Together, its members participate in over 3,000 real estate transactions every year.
All SIBOR members belong to the New York State Association of REALTORS® (NYSAR) and the National Association of REALTORS® (NAR).
SIBOR may be reached at 718-928-3220 and viewed online at http://siborrealtors.com. SIBOR may also be visited on Facebook at “Staten Island Board of Realtors,” on Twitter via @SIBOR, and on YouTube at the Staten Island Board of Realtors and RelevantPR channels.
SIBOR Media Contact: Barton Horowitz
Relevant Public Relations, LLC
Headquarters: 718‑682‑1509
Mobile: 917‑715‑8761
Email: Bhorowitz@RelevantPR.com
