Despite rising home prices, it’s still cheaper to own a home than to rent, reports CNBC. But the toughest part for those who want to buy is actually finding a home.
Inventory levels in April dropped 9 percent compared to a year ago, and listings spent an average of 29 days on the market before selling—the shortest timeframe since the National Association of REALTORS® began tracking such data in 2011.
“One thing we added this month to our REALTORS® Confidence Index is analyzing data on REALTORS®’ comments,” said Danielle Hale, managing director of housing research at NAR. “The two biggest phrases in the comments this month were ‘low inventory’ and ‘multiple offers.’”
The least expensive homes are the toughest to find. Sales of homes below $100,000 dropped 17 percent in April year-over-year. Also, sales of homes under $250,000 dropped more than 6 percent. Yet a new Trulia report shows it’s cheaper to buy than rent in all of the nation’s 100 largest metro markets. So while consumers may have more financial incentive to buy now, they are hard-pressed to find an actual home to buy.
The report shows that buying a home is 33.1 percent cheaper than renting, but there are big differences across metros. For example, it’s more than 50 percent cheaper to buy than rent in Baton Rouge, La., if a consumer is purchasing with a 20 percent down payment and 30-year fixed-rate mortgage. On the other hand, in San Jose, Calif., buying is only 3.5 percent cheaper than renting.
Source: “It’s Cheaper to Buy a Home Than Rent, But Only If You Can Find One,” CNBC (May 24, 2017)