May 1st, 2015
Is Renting Better Than Buying?
The thought of owning your own home does seem enticing, but a lot of renters are avoiding it. There are a lot of setbacks when it comes to buying a home such as being able to qualify for a mortgage, having a large enough down payment and finding a suitable home. These are just a few concerns that renters worry about. According to Zillow, 82 percent of renters are “long-term” renters, which means they don’t really plan on looking to buy a home soon.
Other than qualifying for a mortgage, renters struggle to get the money they need for a down payment due to the cost of rent and their stabilized income. Senior director of economic research at Zillow, Svenja Gudell said, “Since 2000, rents have grown at twice the pace of incomes.”
It is a good time to buy while the interest rate is low and it makes sense in the long term, but many people can’t get over the short-term road block. The primary problem stems from the housing crisis, especially in Las Vegas where many people saw the value of their house plummet by 50 or 60 percent. Gudell stated, “It is hard for a lot of folks to want to enter the market knowing this could happen again.”
Because of the low housing inventory, this is a great time for sellers to put their house on the market. According to Zillow research, homes sold 15% faster and for 2% more than the average due to the low housing supply.