Buying a home has long been part of the American dream. But rising prices have made renting less expensive in many places. People often aspire to own a home for reasons that have little to do with money, and rental options are limited in some communities. However, owning a home could limit your flexibility to move specially during the slow season when you can not sell your home quickly.
Benefits of Renting:
In 12014 the median sales price of existing single-family homes have risen 11.4% compared to last year. This is the highest annual increase since 2005, according to the National Association of Realtors. Considering that price in many places Silicon Valley cities such as Los Gatos, Campbell, San Jose, Saratoga rose in 2013; it has pushed some buyers off the market.
So, consider these items:
- Landlord responsible for maintenance
- Lower monthly cost than owning a home
- No property Taxes
- Saving on down payment
According to figures provided exclusively to The Wall Street Journal by Deutsche Bank.That is up from 15 large metropolitan areas a year earlier. The bank calculates the costs in 54 markets based on average local rents and median home-sale prices, which it uses to estimate monthly mortgage payments for a hypothetical buyer in the 25% federal income-tax bracket.
Renting had been less expensive than buying on average across all the areas Deutsche Bank tracks since at least the early 1990s. But that changed during the financial crisis, as home prices plummeted and interest rates on mortgages dropped. The current rally in home prices appears to be pushing the housing market back toward the historical norm.
Renting has become more appealing financially than it was at the end of 2012 in places such as St. Louis; Orlando, Fla.; and Minneapolis, though buyers still pay much less than renters in those areas.
Finally, buyers, of course, can build up equity as they pay down a mortgage, which can compensate for higher monthly costs.
So, to make your final decision you need to consider your market condition, income tax implications and alternative investments available to you before you can make a decision to rent or buy.