Why Owning a Home Is Cheaper Than Renting

In Richmond, buying a home is still cheaper than renting one.

One of the main reasons is because of these historically low interest rates that we have been experiencing for the last eight years or so. Nationally speaking, buying is actually 36% cheaper than renting.

From a national perspective, interest rates would need to rise to 10.6% for renting to actually be cheaper than buying a home. We haven't seen interest rates that low since 1989, so the odds of interest rates going back to that level anytime soon are highly unlikely.

If you're on the fence about buying a home, it makes a lot of sense to make a move now.

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If you're on the fence, now is the 
time to buy.

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According to the National Association of Realtors, the average family's home is $225,000 if they own a home versus only $5,000 if they don't own a home. Now, some people are at a stage in life where they're not ready to own a home and renting is a better option, and I understand that. However, if you are in a position to own a home, the numbers are clearly in your favor.

While interest rates are this low, you can benefit by owning a home not only to build your net worth but also simply for the fact that it's cheaper than renting. Why pay off someone else's mortgage when you could pay off your own?

If you're thinking about buying a home or you have questions about the Richmond real estate market, give me a call. I'd be happy to help.

Is Renting in Richmond Cheaper Than Buying?

Is it cheaper to rent a home than to have a mortgage in today's Richmond market with the historically low interest rates?

The answer is an emphatic NO!

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   Historically low interest rates are making
 mortgages cheaper than renting.

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Historically low interest rates are making mortgages cheaper than renting. According to Trulia, paying a mortgage is a staggering 34.8% cheaper than paying rent for those who put 20% down on their purchase. I saw that figure and thought it was unbelievable. For retirees, buying is cheaper than renting in all major metros by almost 42%. That's also an astonishing figure.

If you take a look at the graph in the video above, you can see mortgage affordability vs. rent affordability in today's market. Today, 30% of your household income is going to rent if you're renting a home. With today's low interest rates though, only 15% of your household income is needed to carry a mortgage. It just makes sense to buy as opposed to renting. Gallup also recently conducted a poll across various demographics that found that America's choice for the best long-term investment is real estate, besting gold, savings, and the stock market, among others.

If you have any questions about real estate, don't hesitate to reach out to me! Just give me a call of send me an email, and I'd be happy to help.