Still the Cheaper Option
Ownership is the way to go in many local markets. Trulia's Winter 2014 Rent vs. Buy Report shows that home ownership is 38% cheaper than renting on a national basis. The advantage also holds in most local markets. In the 100 largest metro markets, ownership trumps renting, according to Trulia.
We don't believe the 38% advantage will persist into 2015. The advantage will have been whittled away by higher lending rates and higher home prices. Both will be spurred along by job growth, which, in turn, will lead to more household formation – specifically formation in home ownership. In other words, we see more demand.
We've discussed in the past how the home-rental market has changed, with large institutional money pouring into to purchase single-family homes to rent. We've been somewhat skeptical of the business model. Single-family homes don't offer the economy of scale that a building of rentals does. Fixing a plumbing problem in two homes 10 miles apart is different from fixing a plumbing problem in two units 10 yards apart.
In other words, we see a move to more occupied ownership. This is a good thing and a virtuous circle: As more people own a home more people will be inspired to own one too. After all, most of us prefer to live in a neighborhood of owners. We prefer to own.
This is a point worth emphasizing to our clients, as is the point that they can become a part of the virtuous circle at a 38% discount to renting.
Courtesy of Jessica Regan.
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When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.
When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.
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If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.