My favoriate title ninja, Lisa Bain, at Title One here in Boise forwarded me an interesting article yesterday about the cost of renting versus buying. It wasn’t that long ago that for many people renting was the clear choice. But times are changing.
The article, titled Renters Outspend Owners on Housing, cites a CoreLogic study that shows an increase in the percentage of income renters put towards housing compared to home owners. Obviously a lot of people renting are doing so because they feel its a more affordable means of housing than owning.
No doubt, in many cases it is. But as housing prices continue to be soft and interest rates are at record lows it calls into question that assumption.
Yesterday I posted about Boise’s Rental Market and made the case that there’s never been a better time to be in the landlord business here in Boise. The flip side of that is there’s probably never been a better time to buy your first home!! (Speaking of which, sign up for a seven part email series for home buyers at the top of the page!)
Buying vs Renting in Boise
Of course, all things real estate are local. Often what’s true nationally isn’t true locally. And locally is what we care about (or should care about, even if news outlets don’t get that).
I quick trip to Craigslist brings up this home for rent. 4 beds, 2 bath, 2100 sq ft for $1,250 / month near State St and Collister. Not bad I guess.
Taking a quick look on the ol’ Intermountain MLS I find a comparable home for sale in that neighborhood.[idx-listing mlsnumber=”98479911″]
Lets Run the Numbers
One thing that isn’t often talked about with buying a home is most of the time you still need a down payment (although not always). Lets say you get an FHA loan fixed at 4% for 30 years; you would need 3.5% down (or just under $6,000).
House payment, including interest / taxes / insurance? $913.09 / month.
Rent payment with the knowledge you are giving your money way? $1,250 / month.
That’s a pretty good case for if you can buy you should be buying right now!