Will Renting and Owning Ratios Flip in 2011?
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.
Tags: home values, housing news
