According to the real estate website Trulia, buying was cheaper than renting in 74% of the country’s 50 largest cities in July 2011 . Experts say it may be cheaper to buy than rent for a number of reasons:
- Rock bottom interest rates. In early Aug. 2011, a 30 year fixed was just 4.19%!
- Home ownership comes with tax perks that renters don’t get to enjoy – you get to deduct your mortgage interest as a homeowner. You don’t get to deduct your rental fees as a renter.
- Low prices – it’s a buyers market and prices are lower than low. If you can afford to buy, consider doing so because it will force you to save your money in a safe investment – your home!
So does this mean you should rent or buy right now?
The answer to this question is, “It depends.” Can you afford to buy? Do you have enough for a 20% down payment? Do you plan to stay in the home at least seven years? Can you afford closing costs and home ownership costs? Do you feel secure in your job or in the job market of where you want to buy?
If you answered “yes” to these questions, then you should consider buying. If you answered “no” to any of these questions, you might want to consider renting until you are more financially and emotionally secure.
How does this relate to corporate housing? We (at CHBO) always recommend that individuals rent first, buy later. Renting allows someone to learn about a city, neighborhood and to get their feet wet before locking themselves into a permanent residence where it’s unlikely they’ll get out of the house any time soon, even if they tried. Mobility is severely limited in tough job and housing markets – so be sure before you buy, period.
However, with the uncertainty of the economy, housing and job market, renting might make more sense for someone new to the housing market or the person willing to relocate for work. Renting provides a greater flexibility than buying, as you’re only tied to a short term lease. Plus there are limited upfront costs associated with renting.