American dream could cost you less than renting a home
Thu, 11 Oct 2012 21:50:00 GMT —
Mortgage rates are near record lows, making it now cheaper to buy a home than to rent.
"It's literally the great-half-price sale," said Grand Strand real estate agent Craig Dierksheide.
The national real estate company, Trulia, says if you plan to live in the same house for a while, it would cost 45 percent less to own that home than to rent it over a seven year span.
"It gets back to good old supply and demand," said Dierksheide.
The demand is for rental properties because a lot of people have been kicked out of their foreclosed homes, and there's a large supply of foreclosed homes.
That perfect storm has increased the price of rentals and made home ownership cheaper.
"The key is the length of time," said Dierksheide. "You have to be there 5-7 years to make up for the expenses of what it costs to purchase a home, if you can get a loan."
Loans are much more difficult to come by than they were in the housing boom before the crash of 2008.
But according to Myrtle Beach mortgage broker Travis Minter, if you have good credit, owning a home is in your favor.
"The guidelines have changed for owning a home since 2008," said Minter. "But if you have collateral, there's plenty of activity."
"It definitely is tougher to get a loan these days, but they're still out there," said Dierksheide. "The banks are making money. They are just more conservative than they used to be."
A potential owner should look at the entire picture of owning a home not just the up front costs, said Dierksheide.
"You have to add the maintenance costs. You have to add the taxes off the top of that and all that can add a few hundred dollars so the gap is maybe not quite as big as it looks because it's still less than because of the increase in demand in rental properties."
This week the country's 30-year loan rate increased to 3.39 percent.
Last week's rate was the lowest since long-term mortgages started in the 1950s.