- Find a Real Estate Professional
- Realtors®
- Mortgage Lenders
- Home Improvement Pros
- Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- Popular
- Real Estate Market Reports
- More
Replies (23)
- Joe Hoppis, "Joe Hoppis"
- Contributions:18
- Susie Smith, "SanFranciscoSusie"
- Contributions:1
It really depends on where you want to buy.
There are many benefits to both renting and homeownership. You should consult with a REALTOR in the area of where you are considering buying.
There are many benefits to both renting and homeownership. You should consult with a REALTOR in the area of where you are considering buying.
- Winston Heverly, GRI, SFR, "Atlantis FL"
- Contributions:10
With the lack of inventory, believe it or not it is worthy of looking into buying if you have the down payment and purchase power. With rates so low it's cheaper to buy. Rates may not stay this low forever. Prices will be flat for 
the next several years in my opinion. South Florida offers some incredible deals if you have the cash.
the next several years in my opinion. South Florida offers some incredible deals if you have the cash.
- Peter Jordan, "Peter Jordan"
- Contributions:36
Most people understand the concept that buying a home is a solid investment, but many people still renting may not be clear of the other benefits associated with owning your own property. Here are a few of the best benefits I see of becoming an owner and leaving the renter's world behind.
Housing Costs
Rental costs are increasing and will continue to increase for as long as you rent. Taking into consideration how much rent you paid ten years ago, and what you are paying now, will be a good indication of what you can expect to pay ten years from now. A mortgage gives a much more stable option. Buying a home with a fixed rate mortgage ensures that your payments will remain the same for the entire length of the loan. Even a mortgage with an adjustable rate will keep your payments in a very stable position.
Income Tax Deductions
Anyone that purchases a home saves money at tax time. Not only is the interest deductible, but so are the property taxes. Rent doesn't give you any tax breaks, and quite often costs more than a mortgage on a small house.
Future Savings
When you own a home you are technically saving money for the future. You are not only putting money into a future investment, but as you are paying it off, your home is raising in value. You are saving money and making money at the same time. It is truly a win-win situation.
If you have never looked into all the savings you can have by investing in your own home then take a look at all of the savings and add them up. You may be pleasantly surprised to find that owning can be cheaper than what you are currently paying for in rent.
Again, though, every one's situation is different, and what benefits one may not benefit another (despite what realtors and NAR may tell you).
Housing Costs
Rental costs are increasing and will continue to increase for as long as you rent. Taking into consideration how much rent you paid ten years ago, and what you are paying now, will be a good indication of what you can expect to pay ten years from now. A mortgage gives a much more stable option. Buying a home with a fixed rate mortgage ensures that your payments will remain the same for the entire length of the loan. Even a mortgage with an adjustable rate will keep your payments in a very stable position.
Income Tax Deductions
Anyone that purchases a home saves money at tax time. Not only is the interest deductible, but so are the property taxes. Rent doesn't give you any tax breaks, and quite often costs more than a mortgage on a small house.
Future Savings
When you own a home you are technically saving money for the future. You are not only putting money into a future investment, but as you are paying it off, your home is raising in value. You are saving money and making money at the same time. It is truly a win-win situation.
If you have never looked into all the savings you can have by investing in your own home then take a look at all of the savings and add them up. You may be pleasantly surprised to find that owning can be cheaper than what you are currently paying for in rent.
Again, though, every one's situation is different, and what benefits one may not benefit another (despite what realtors and NAR may tell you).
- wetdawgs
- Contributions:26798
Semi-myth 1: "Buying a home with a fixed rate mortgage ensures that your payments will remain the same for the entire length of the loan" For the loan itself that may be true, but property taxes and insurance will not remain the same.
Myth 2: "Anyone that purchases a home saves money at tax time." Not true. Mortgage interest deduction only applies if one can itemize (and the majority of home owners can't.) If one buys with cash, there is no mortgage interest deduction to contribute to tax savings.
Myth 3: "When you own a home you are technically saving money for the future. You are not only putting money into a future investment, but as you are paying it off, your home is raising in value." Try this one on people who purchased in 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, heck even 2011!! I think it will fly like a lead ballon.
Myth 2: "Anyone that purchases a home saves money at tax time." Not true. Mortgage interest deduction only applies if one can itemize (and the majority of home owners can't.) If one buys with cash, there is no mortgage interest deduction to contribute to tax savings.
Myth 3: "When you own a home you are technically saving money for the future. You are not only putting money into a future investment, but as you are paying it off, your home is raising in value." Try this one on people who purchased in 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, heck even 2011!! I think it will fly like a lead ballon.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Wetdawgs: What a terrific rebuttal to Peter Jordan's comments. If Zillow would allow someone to give more than one thumbs up, I certainly would.
I think most consumers know what the current state of the real estate market is like. This type of NAR rhetoric, must hurt REAs like Jordan, that are trying to have current buyers base buying decisions on a up-market, which is certainly not what buyers or sellers are experiencing today.
I am sure for many buyers, this would be all they need to hear, before shopping for another REA. As for sellers, I am fairly confident that Jordan would not be using the same up-beat approach.
Jordan, just think about it. Most of today's buyers get on the internet, watch the news and read periodicals and newspapers. An honest approach, is the best approach, to achieve good standing, referrals, and closed sales. Best wishes.
Happy Holidays, Rudi
I think most consumers know what the current state of the real estate market is like. This type of NAR rhetoric, must hurt REAs like Jordan, that are trying to have current buyers base buying decisions on a up-market, which is certainly not what buyers or sellers are experiencing today.
I am sure for many buyers, this would be all they need to hear, before shopping for another REA. As for sellers, I am fairly confident that Jordan would not be using the same up-beat approach.
Jordan, just think about it. Most of today's buyers get on the internet, watch the news and read periodicals and newspapers. An honest approach, is the best approach, to achieve good standing, referrals, and closed sales. Best wishes.
Happy Holidays, Rudi
- Ania Miller, "amiller18"
- Contributions:49
The "wrestlig match" is over! and, you could be the winner! Interest rates are awesome and the rentals are going up in price. You could most likely pay less per month by becoming a home owner. Aren't you tired for paying someone else's mortagage? This may be the time for you to reap the benefits of home ownership.
Ania
Ania
- Dan, "the_country_hick"
- Contributions:4693
With low interest rates and a limited relatively stable income how do I win?
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year $82,000 mortgage costs $491.63 a month at 6.00%
A 30 year $80,000 mortgage costs $492.57 a month at 6.25%
A 30 year $69,000 mortgage costs $494.32 a month at 7.75%
A 30 year $67,000 mortgage costs $491.62 a month at 8.00%
A 30 year $56,000 mortgage costs $491.44 a month at 10.0%
The numbers say a house costs more when interest rates are lower and a house costs less when interest rates are higher.
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year $82,000 mortgage costs $491.63 a month at 6.00%
A 30 year $80,000 mortgage costs $492.57 a month at 6.25%
A 30 year $69,000 mortgage costs $494.32 a month at 7.75%
A 30 year $67,000 mortgage costs $491.62 a month at 8.00%
A 30 year $56,000 mortgage costs $491.44 a month at 10.0%
The numbers say a house costs more when interest rates are lower and a house costs less when interest rates are higher.
- christobul
- Contributions:1
REMEMBER THE LOWER THE INTEREST RATES THE LESS OF A WRITE OFF IN TAXES.
- Cindy Quinton, "Cindy Quinton"
- Contributions:1321
Rather than spout some of the nonsense I see here (thank you wetdawgs and a thumbs up to boot) why don't realtors focus on the real positives of home ownership and be realistic. Hey guys if we are here, we are on the internet and read the NEWS...
I never see anyone talk about the intrinsic value in home ownership. Being able to plant and grow your own food in even a small back yard would be one realistic financial advantage. But the joy of gardening in your own yard can't be quantified financially. Or things like being able to paint a room the color of your choice or puting new tile in the bathroom without asking the owner. The "not having to ask" is an important motivating factor in this over governed society. Making those marks on the door as your child grows, that's a reason to buy a home. Focus on the actual living in the house....that's why people buy HOMES.
But you guys are welcome to go back to selling HOUSES.
I never see anyone talk about the intrinsic value in home ownership. Being able to plant and grow your own food in even a small back yard would be one realistic financial advantage. But the joy of gardening in your own yard can't be quantified financially. Or things like being able to paint a room the color of your choice or puting new tile in the bathroom without asking the owner. The "not having to ask" is an important motivating factor in this over governed society. Making those marks on the door as your child grows, that's a reason to buy a home. Focus on the actual living in the house....that's why people buy HOMES.
But you guys are welcome to go back to selling HOUSES.
- sunnyview
- Contributions:25127
"I never see anyone talk about the intrinsic value in home ownership."
I disagree. That's ALL many agent talk about, but those intrinsic benefits do not pay the mortgage. I believe in homeownership and feel that they are both financial and intrinsic benefits, but I also believe that a happy house starts with one that you can easily afford and sell if you need to.
I disagree. That's ALL many agent talk about, but those intrinsic benefits do not pay the mortgage. I believe in homeownership and feel that they are both financial and intrinsic benefits, but I also believe that a happy house starts with one that you can easily afford and sell if you need to.
- Cindy Quinton, "Cindy Quinton"
- Contributions:1321
Oh I absolutely agree with that, but what I see here (and in old threads right through the top of the market) is that this house you are buying is going to be some kind of financial boon. When in fact many people stretched their budget and put themselves in financial ruin BECAUSE they thought they were making an investment.
I personally think people shouldn't be buying a home if they don't have a substancial amount of money down and six months worth of mortgage payments, regardless of credit. And your payments shouldn't be so high that you have to make constant sacrifices to live there. Seems like you would grow to hate a house that held you financial prisoner.
I personally think people shouldn't be buying a home if they don't have a substancial amount of money down and six months worth of mortgage payments, regardless of credit. And your payments shouldn't be so high that you have to make constant sacrifices to live there. Seems like you would grow to hate a house that held you financial prisoner.
- Jimmy Benson, "Jimmy Benson"
- Contributions:2
In our area we are starting to see signs that investors and buyers are feeling confident. I am always cautious if there is a possibility that in a year you might have to move and then could be in a tight spot. If you feel good that you will be in a home at least 2-5 years then now is an incredible time to enter the market. Find a good buyers agent and ask what to look for in your budget.
- Dan, "the_country_hick"
- Contributions:4693
Jimmy, just how do you figure that anyone can buy a house and sell it in 2 years and not lose a lot of money? Just closing costs and realtor fees will cost 8-10% of the selling price.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
@Dan TCH
Why didn't the purchase price phenomenon, you often cite, happen in the 70's?
Why didn't the purchase price phenomenon, you often cite, happen in the 70's?
- SteadyState
- Contributions:783
Dan's adjustments are for non-high inflation environments. If inflation gets out of control all commodities and hard assets (including houses will rise).
Some notable articles on the high inflation experienced in the 70s.
1. Inflation in the seventies (by Edward nelson).
2. The inflation of the 70s (Professor of Economics J. Bradford DeLong)
A more direct analysis (but somewhat simpler) of interest rates and home prices has been published by Trevor Cottam.
A direct quote from the last article:
"But no, when inflation and thus nominal interest rates increase, housing prices tumble. When rates fall, housing prices tend to increase."
Some notable articles on the high inflation experienced in the 70s.
1. Inflation in the seventies (by Edward nelson).
2. The inflation of the 70s (Professor of Economics J. Bradford DeLong)
A more direct analysis (but somewhat simpler) of interest rates and home prices has been published by Trevor Cottam.
A direct quote from the last article:
"But no, when inflation and thus nominal interest rates increase, housing prices tumble. When rates fall, housing prices tend to increase."
- Dan, "the_country_hick"
- Contributions:4693
Hamp, look at these threads to see your answer.
History of 30 year fixed rate mortgages. Why low interest rates cause house price drops..
WHy the 1970's saw higher house prices and why that will not repeat once interest rates rise now.
Correlation of Mortgage Rates With Real Housing Prices
Those threads explain it. A big piece was the advent of the 2 income family driving prices higher. You also need to look at family wage inflation as compared to simple commodity inflation. If family wages rise prices can rise. If family wages do not rise prices must stabilize lower. I have said this many times over. I have also said that when interest rates rise if incomes do not also rise to match then leveraged prices will be pushed lower. When inflation is tamed the nominal prices would then be higher but inflation adjusted they may or may not have changed.
History of 30 year fixed rate mortgages. Why low interest rates cause house price drops..
WHy the 1970's saw higher house prices and why that will not repeat once interest rates rise now.
Correlation of Mortgage Rates With Real Housing Prices
Those threads explain it. A big piece was the advent of the 2 income family driving prices higher. You also need to look at family wage inflation as compared to simple commodity inflation. If family wages rise prices can rise. If family wages do not rise prices must stabilize lower. I have said this many times over. I have also said that when interest rates rise if incomes do not also rise to match then leveraged prices will be pushed lower. When inflation is tamed the nominal prices would then be higher but inflation adjusted they may or may not have changed.
- Wes Black
- Contributions:509
In Louisville, Ky, there is a real possibility in 2012 that it may be cheaper to buy than to rent. Our rental market has few apartments available and the current rents are on the rise.l With interest rates under 4% and great availability of residences, our local buyers are opting for the purchase. Pride of ownership, tax advantages, decorating touches etc is winning over the renters. It is a great sign for our city's recovery
- Gary Bell, "Gary Bell"
- Contributions:45
Nice...Thanks for that link!
- Bessy Enea, "BessyEnea"
- Contributions:13
I would look into buying, the prices are down, the rate is super low, how can you not.
- Wes Black
- Contributions:509
Great post and answers.
- Sherri Bloom, "Sherri Bloom"
- Contributions:60
Hi Joe. In some markets, it's actually more expensive to rent than buy. I would schedule a meeting with a lender and see how realistic it is for you to buy right now. If you need more time, renting is a good option for a short amount of time. Take a close look at both, crunch the numbers and see what makes the most sense long term. Good luck!
- Nicholas Ribeiro, "NicholasRibeiro"
- Contributions:1807
Renting is not as bad as society will make it sound. Buying is only better if you plan on staying long term.
Been renting and wrestling with tempting interest rates on buying?
-
- 5.0/5.0
- (9 reviews)
Contributions:18Here is a great tool provided from the New York Times:
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
It's also worth sitting down with a professional and sharing your needs vs. wants both from a living but also a financial perspective.
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.