Owning a home still more costly than renting
May 9th, 2008, 9:50 am · 2 Comments · posted by mistywilliams
Home values may have plummeted in the past year, but prices are still significantly out of line with apartment rents, according to a new study.
The average monthly cost of owning a home in the Valley is roughly $1,532, compared with $862 for a two-bedroom apartment or $1,256 for a three-bedroom, a study by the Center for Economic and Policy Research shows.
The trend is similar in other major metropolitan areas across the country, including Las Vegas, and has resulted in increased demand for rental housing.
In the past year, the number of renter households nationwide jumped by nearly 1 million, compared with an increase of 139,000 in homeowner households, according to the center’s study.
Despite the major shift in demand, however, the growth in Phoenix rental rates has slowed considerably.
That’s mainly because the increased demand has been matched by a growing supply of houses for rent by desperate sellers and investors. Developers are also turning failed condominium conversion projects back into apartments.
The result: More landlords are offering concessions these days, the most popular of which is a month’s free rent, so now may be the time for renters to lock in rates.
May 10th, 2008 at 11:58 pm
How are you allowed to write a real estate column?
You make no comment beyond the straight monthly mortgage vs. rent comparison.
Assuming a three bedroom rental vs owning a three bedroom, when one adds in the tax deduction on interest (even assuing you have been in the property ten years and are at a $1,000 in interest to $532 in principle payment ratio, and you can subtract $300 a month from the mortgage in tax savings and would now have a lower net payment than renting.
Throw in that real estate, over time, is the greatest wealth builder for “average” Americans who do not have a large stock portfolios, and the fact that the homeowner will have title in 15-30 years (unless they strip equity via refinancing every chance they get), and then will have only taxes and insurance to pay in their Golden Years rather than an inflation adjusted rent (figuring 20 years out in this scenario) of well over $3,000 per month.
June 8th, 2008 at 12:12 am
Would you rather live in an apartment or a house?? Owning is much better than renting. Even if it did cost a little more you couldn’t pay me to rent somebodies beat up property.