The real estate markets of the past few years have shown renters to be on the rise. Yet with housing prices falling and rents increasing, will we see a flip in those ratios as we move forward into 2011?

With home prices still in a very reasonable span in most markets in the country, we anticipate that by year’s end, the ratio will flip. Not only will many of the homeowners who were foreclosed upon a few years ago again qualify for a mortgage, but the practice of buying will simply make better financial sense. Why rent a home for $1000 that you could buy for $800 with the entire mortgage interest deduction?

Some reasons to reconsider home ownership if you’re currently renting:

• Mortgage interest deduction: Consult your tax professional, but many people enjoy deducting the full amount of mortgage interest paid on their home each year, which can add up to significant tax savings.
• Better financial sense: Compare rent and mortgage rates on homes you can afford. Odd are you can get significantly more home for your dollar through buying, even if you have to take a year to save up a modest 3% to 5% downpayment.

CNN Money published an article this week listing the price-rent rations in many major cities. It’s definitely worth a look! See how your locality measures-up.

We’re wishing you and yours a delightful new year. If you need ideas on getting out and about, be sure to check our local events calendar.

The Staff at San Juan Realty, Inc.