The decision whether to buy or rent a home may have long-term implications.
Please refer to our transcription below if it is easier and/or more convenient for you:
Whether to buy or to rent your home may depend on four important questions:
Where do you want to buy? In many areas you may find that housing prices are affordable. The housing affordability index shows 74% of families can afford a home.
How long do you plan to own the home? Transaction costs take time to recoup, so the decision to buy improves with a longer time horizon. On average, if you plan to stay in the home for five years or more, consider buying.
What percentage of your income will go toward payments? As a rule of thumb, you should consider spending less than a third of your income on housing. A fourth of your income may be an even better ratio.
What is the price to rent ratio in the neighborhood? This ratio is the home price divided by the annual rent. A good ratio is below 15. A $300,000 home that rents for $2500 a month, or $30,000 a year, has a ratio of 10, which means it may make more sense to buy. One study found that buying a home is more affordable than renting in 80% of major cities.
To buy or not to buy is an important question. Call today and let’s talk about it.
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