Moving to a Buyer’s Market?
US Housing Market Is Shifting
According to the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, the U.S. housing market has moved into “buy” territory, supporting the notion that housing markets across the country remain a sound investment. The index examines the entire US housing market and then isolates 23 major cities for comparison.
The BH&J Index is a quarterly report that addresses the question: In today’s housing market, is it better to rent or buy a home?
The aim of the research is to: “measure the relationship between purchasing property and building wealth through a buildup in equity versus renting a comparable property and investing in a portfolio of stocks and bonds.”
While the majority of the metropolitan markets examined moved further into buy territory (16 of the 23), markets like Dallas, Denver, and Houston are currently in rent territory. Due to a lack of inventory, the home prices in the Dallas, Denver, and Houston areas have increased by 11.6%, 8.3%, and 6.6% respectively. Home prices in these areas will begin to return to more normal levels as people realize renting is not the best option, therefore bringing home affordability back as well.
Real Estate Bottom Line
The majority of the country is strongly in buy territory. Buying a home makes sense socially and financially, as rents are predicted to increase substantially in the next year. Protect yourself from rising rents by buying a home and locking in your housing cost.
To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.