It may be hard to believe, but it’s true: Buying a home is actually cheaper than renting it! But how can that be when prices and mortgage rates are constantly growing higher?
According to The Wall Street Journal, while mortgage rates have been steadily going up over the past year, they’re still around historically low levels. In fact, today’s average interest rate for a 30-year loan is still a ways off from 5 percent, which was considered the average just before the housing bubble burst. These low rates have helped work against increasing home prices, making owning a home considerably cheaper than renting.
The WSJ adds that it would take mortgage rates to shoot up to a whopping 10.6 percent for renting to become the more affordable option — a level that hasn’t been seen since 1989! So, it’s safe to say that first time home buyers are in the clear.
Of course, not everyone is suited to owning a home. For one thing, a good rule of thumb to follow is to have a 20 percent down payment ready to go before pulling the trigger on your purchase. If you have difficulty putting those kind of funds together and would have to take out a larger loan to compensate, renting may be the better choice. You also should only buy a home if you’re looking to lay some roots down for you and your family. If your job requires frequent relocation, or you simply don’t expect to stay in one place for long, then go for a rental.
But if you don’t meet these unique circumstances, then buying is the way to go. With price appreciation looking to cool off this year, 2014 makes for a good time to buy. If you’re looking for a new place in Salt Lake City, reach out to the Muve Real Estate Group for help!