Believe it or not, there are cities out there where renters should buy instead of renting because the gap between what you are going to pay for a mortgage and what you are going to pay for rent is shrinking. Why would anyone continue to just throw money out the window if they have an opportunity to build equity in a home and earn some money and tax benefits by doing so?
Ok, to be fair, there are a variety of reasons to rent instead of purchasing. Some of those reasons being you can’t afford the down payment, you don’t want the responsibility of home maintenance, you don’t want to be tied down to one location. Yes, the list can go on and on if you would like, but there comes a time in every renters life when they should at least consider purchasing their own home. It can’t be as bad as they might think it is.
Behind the Numbers
We were reading a great article that lead us to write this one. And in this article, they take you behind the numbers on why they are suggestion buying over renting in certain cities. Here is what they said:
To find cities where it’s a good time to go from renting to buying, we used data from Witten Advisors, which calculated the premium to buy for 42 Metropolitan Statistical Areas across the country using data from the U.S. Census, the National Association of Realtors and a blended average of fixed- and adjustable-rate mortgages from the Federal Housing Finance Agency, which oversees and regulates lenders. We compared the premium in the third quarter of 2009 with the average premium over the last 15 years to find the biggest drops.
We also wanted to pinpoint markets where home buying is a smart investment, so we factored in the five-year forecast in the S&P/Case-Shiller Home Price Index from Moody’s Economy.com. The cities on our list have some of the biggest discounts on the premium to buy coupled with big projected increases in home prices over the next five years.
You can view the entire article here on MSN Real Estate, but the there are some major cities out there that you should be purchasing in instead of renting and they give you the insight on why.
Here are the top 5 cities where renters should be buyers:
1. Boston-Cambridge-Quincy, Mass.
2. Charlotte-Gastonia-Concord, N.C.-S.C.
3. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
4. Cincinnati-Middleton, Ohio-Ky.-Ind.
5. Denver-Aurora-Broomfield, Colo.
Are there any cities that you would add to this list? Where do you think people should by buying instead of renting?
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