Buying vs. Renting 2011 Update
Trying to decide whether t
o rent or to buy? Trulia recently released their 2011 3rd Quarter numbers that calculates the price-to-rent ratios for the 50 largest U.S. cities using the median list price to buy compared with the median rent on two-bedroom apartments, condos and townhomes. In the July 2011 numbers Dallas was ranked 13 with a ratio of 12. Trulia categorizes cities between a 1-15 ratio to be much less expensive to buy than to rent. Overall according to the study, buying was cheaper than renting in 74 percent of the country’s 50 largest cities.
Oddly, Fort Worth ranks number 49 at an ratio of 32 which indicates that renting in this city is much less expensive than owning a home. To see more large cities and where they rank check out Trulia’s interactive map.
Our team has had several lease prospects turn into happy buyers over the past few months once we showed them the numbers. In today’s buyers market with softer real estate prices combined with rock-bottom interest rates a buyer in Dallas and Collin County can easily purchase a home with a lower monthly mortgage payment (including taxes and insurance) than compared to a rental rates in the current competitive rental market that continues to drive rental rates higher. Add that fact to some of the benefits of homeownership like building equity, more choices in location and stability for you and your family then it may make sense to start looking for a home to buy instead of renewing your lease.
Of course there are a few more things to consider before deciding to make a purchase:
- Do you have cash for the closing? (visit with a mortgage consultant to see how much you will need – ask us for recommendations on who to call)
- How long do you plan to stay?
- Can you afford the added expenses of home ownership? (HOA dues, maintenance, etc…)
The ultimate decision depends on each person’s situation and their plans for their future, but if you need more information to make your decision contact The Marr Team, your real estate consultants, we would be happy to help. And even if leasing is a better option for you – we can help there too.
Thinking of doing some final shopping to get those kids ready for school? Or just want to stay out of the heat and inside with a little shopping this weekend? It’s Tax Free Weekend and that could mean saving a little extra money on many items, but some you may not realize too. For example, what if your kids are not school age yet – did you know baby clothes and diapers are included in the list? Or if you want to prepare for our next rainstorm – pick up your raincoats or ponchos this weekend tax free. Need new workout clothes or ties – yep those would be tax free too if they are under $100. So while an 8.5% sale would not get most of us racing to the stores saving that bit of extra money on items you need anyway and are already on sale may be that extra savings that get you out in the crowds this weekend.
Wise consumers are fleeing the insecurity of the adjustable rate mortgage (ARM) loan for fixed-rate loans. According to the latest mortgage application data from the Mortgage Bankers Association (MBA), borrowers are clearly choosing fixed-rate loans over adjustable rate loans – less than 7 percent of the total applications were for adjustable-rate loans. That leaves the vast majority of borrowers, whether refinancing or getting a new loan, choosing a fixed-rate loan for their purchase or refinance. Borrowers choosing fixed-rate loans will typically select a 30-year fixed-rate mortgage, but depending on your situation and needs, it could save you thousands to also “run the numbers” on a 15-year loan.