Is it better to buy a house, or rent? For a long time home prices were lower because of downturn in the housing market and attractive mortgage rates. Home ownership was possible for many people from all socio-economic communities.
Home ownership has proven to be a smart investment. In addition to having a place to live owners benefit from the increase in equity that is created when the market improves. Interest on home mortgages are tax deductible, lessening the tax burden for the owners. When it comes to making decisions about colors, flooring options and personal effects, it is the owner who gets to express themselves. Homes prices have soared in our area and owners have enjoyed the gain.
Renting a home can be an attractive alternative for those who do not want to buy, or are unable to secure the financing. There is freedom in renting. The responsibilities associated with maintaining a property can be overwhelming. Repairs can be very expensive and inconvenient. Renters are only responsible for the damage they have created. There is a certain freedom that goes along with renting. Not being tied down to a property can make a lot of sense for those whose jobs are unstable and the likelihood of needing to move is a concern. But renters don’t have the security that owners have. A lease will protect both landlord and tenant, but renters can be asked to leave when it is inconvenient for the renter to locate another place to live. Having no authority over the property can be a disadvantage.
The last ten years in the housing market has been good for home ownership. In 2008 when the stock market crashed, home prices fell, creating an opportunity for first time buyers to participate. Market fluctuations are normal and even healthy for a vibrant market. In just the last decade, the prices of homes in our area have tripled from they were in 2006.
There is a high demand for homes and not much supply. Competition for affordable housing is intense. Renters face huge price increases in order to remain in the area. As the value of the home increases, and supply tightens, the rent usually increases as well. A fixed rate mortgage gives the homeowner a level of stability that is very important part of being able to finance a purchase and keep the house that is often a home, not just an investment.
The good news is although home prices are dramatically higher than they were years ago, other aspects of the economy are on the rise. The employment rate has never been better in years, interest rates are low and buyers are encouraged. The need for new home building in our area is being discussed in many circles as prospective home buyers are increasing in number daily.
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