Rent or Buy?

A recent analysis conducted by the Associated Press shows that the gap between the median rent and monthly mortgage on a median-priced home has shrunk, from $771 to $221, in the last 3 years. In some metro areas, such as Cleveland, Atlanta, Indianapolis and St. Louis, the gap is less than $100 a month. The gap is likely to shrink further as home prices are expected to fall in the near-future. Given the fall in home prices, low interest rates and tax incentives, the scales are tipping toward ownership. But with banks tightening their credit standards, renters may not find it easy to get a loan for buying home.

“There’s still those buyers that are having trouble getting financed,” says Brad Snyder, an agent with ZipRealty. “A lot of them are still just looking for that easy way in, and it’s just not there.” In addition, renters who work in sectors such as education, retail and transportation industry find that their salary is insufficient to even pay their rent, according to a study by the Center for Housing Policy. Experts say homeowners face a number of additional costs such as insurance and association fee, making the “buy” option expensive.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.