To rent or to buy, that was the question my client, Marcus, (pictured below) was faced with. After a couple of months searching the Internet for both rentals and homes for sale, he was able to purchase his first home for hundreds of dollars less a month than what he would have paid in rent. With current market conditions consisting of steadily rising rents, falling home prices, and low mortgage rates it was no surprise that the rent vs. buy scale are tipped in favor of homeownership.
According to Trulia.com, in a report released in late April 2011, it is cheaper to buy a home than rent one in 72% of major metropolitan areas. Of the 50 major cities reviewed by the report, Denver was rated #22 in the homebuyers market with a rent ratio of 13. A price-to-rent ratio of 1 to 15 means that it’s much cheaper to buy than to rent in a particular city. A ratio between 16 and 20 means that it’s more expensive to rent than to buy, but, depending on the family’s situation, buying could “make financial sense,” the site says. Any ratio above 20 indicates that owning is much more costly than renting in a city.
As we head into the summer buying season, those looking to buy a home should be encouraged by improvements in the market and feel optimistic about their chances of finding an affordable home.
Call me at 720-220-1394 if you’d like to discuss your options.
