Tuesday, October 25, 2016
By Admin


It would be fair to say that this blog hasn't exactly been reticent to extol the virtues of buying a home rather than renting.

At the end of last week, Trulia.com announced that buying a home is now on average 37.7% cheaper than renting, on a nationwide basis, for households who move every seven years and can afford to put 20% down.

In actual fact, this figure is only marginally up on last year, with rises in home prices across the nation somewhat offsetting the falls we've seen in mortgage rates. The fact remains, however, that there is still a powerful argument not to delay home purchase, if you can possibly act now.

Let's not also forget that, according to a recent Corelogic report, current home equity gains here in New Mexico are modest compared with some other areas of the county, indicating lower price inflation than that seen in many areas.

What really caught our attention in the Trulia report, however, was how much mortgage rates would have to rise to make renting competitive using the above seven year move/20% down parameters.

Trulia says that rates would have to rise more than 5% for home buying's current advantage to erode. While we can never be sure exactly how things will play out, that's a very, very long way for rates to climb from today's ultra low levels.

As always, of course, the decision to rent or buy isn't only a financial one, but given the attractiveness of mortgage rates, which the Trulia report shows are keeping price rises in check, there seems little sense in playing a waiting game hoping that things will get even better.

Right now we're in a window of opportunity that is arguably unrivalled in recent history. Low inventory of available homes for sale naturally contributes to higher prices, given such strong demand, but the logic of locking in a very low home loan interest rate while it's still possible to do so means that you have effectively fixed your monthly outgoings, in terms of providing a roof over your head, for the life of the mortgage. And when the mortgage ends, of course, a big monthly outgoing disappears forever! Rent is, of course, a permanent monthly outgoing that will unquestionably become more expensive as time progresses.

Why not seize the moment now to reconsider your situation. Contact us today for advice on the best home buying options tailored to your individual circumstances.

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