October 30, 2012
Homeownership 45% Cheaper Than Renting!
Recently Trulia reported that homeownership is 45% less expensive than renting in the United States. According to Trulia’s Chief Economist:
“Homeownership is cheaper than renting in all of the 100 largest metros, by a wide margin. Despite the recent price rebound, rents continue to rise faster than prices, and mortgage rates are near record lows. Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes.”
So, it currently costs more to rent than to buy … and, at the end of the year you don’t get any tax relief for paying your rent every month. Plus, as Dr. Ken Johnson explained in a blog post earlier this year, homeownership promotes wealth creation via “forced savings”;
“It appears that home ownership creates extra wealth mainly through its ability to force owners to save rather than through property appreciation. Thus, homeownership appears to be a self-imposed savings plan, which through time leads to greater wealth accumulation as compared to comparable renters. In short, buying a home makes Americans save.”
Hopefully all of the above is a sign the pendulum is swinging back, in favor or owning your own home!
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This post was written by Greenbank Development