Still Cheaper to Purchase

Trulia has released its latest Rent vs. Buy Report, revealing whether buying a home is more affordable than renting in America's 100 largest metropolitan areas.  Looking at homes for sale and for rent on Trulia between June 1 and August 31, 2013, this study compares the average cost of renting and owning for all homes on the market in a metro area, factoring in all cost components including transaction costs, taxes, and opportunity costs.

In the last year, the rate for a 30-year fixed-rate loan rose from 3.75% to more than 4.50%, raising the cost of buying home relative to renting.  Homeownership is now 35% cheaper than renting nationally, down from being 45% cheaper one year ago.

"While it's hard to believe after the recent spike in rates, it's still more than one-third cheaper to buy a home than to rent," said Jed Kolko, Trulia's chief economist.  "Recent rate and home price increases have made buying significantly more expensive than last year, but not enough to tip the math in favor of renting.  This is because rates remain well below historical norms, and prices are still slightly undervalued, too."

Source: NAMP Daily 

Compliments of Suzanne Smith

HNB Mortgage

Move Up Buyers - Join The Party!

Housing demand from move-up buyers selling their current properties to replace them with a more expensive home is on the rise as home equity levels improve.  As home prices continue to increase, so does demand from move-up buyers, who are now able to provide a substantial down payment on a new home after gaining value on rising equity, the latest report from real estate data firm FNC revealed.  "An important sign of a healthy and sustainable recovery is increased housing turnover driven by trade-up buying, which is more or less discretionary spending," FNC Director of Research Yanling Mayer said.

Much of the desire for move-up buyers lies behind rising rates.  "They know if they don't move now, they might be kicking themselves all over again in three months," said Redfin real estate agent Eric Tan.  According to Daren Blomquist, VP of RealtyTrac, 18.5 million homeowners have at least 20% equity or more, putting them in a prime position to sell and 8.3 million owners should have at least 20% equity in the near future if prices continue to appreciate.  "This reflects a market that is transitioning from investor purchases of distressed homes to primary home purchases," said CAR economist Leslie Appleton-Young.

Source: HousingWire 

Compliments of Suzanne Smith

HNB Mortgage