Housing Market Favors Home Ownership
According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, home ownership is a better way to accumulate wealth than renting. The first quarter index showed that “16 of the 23 metropolitan markets investigated moved in the direction of buy territory.”
Is it better to rent or buy a home in today’s housing market?
“The U.S. housing market, when considered as a whole, has swung marginally more in favor of home ownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds.”
Ken Johnson Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:
“This [growth] appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds.”
Dallas and Denver are two of the major cities that continued to move deeper into rent territory, but they moved at a slower rate than in previous quarters. Johnson believes that, in these two markets, “strong economic support…should make for a soft landing in terms of slowing property price growth, increased marketing time for properties and lower probabilities that sellers will actually transact and close during a given marketing effort of their property.”
Real Estate Bottom Line
Buying a home makes financial sense. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.
To Find Out More About the Study: The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.
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