Renting VS. Buying. Top 10 Reasons Why 2011 Is The Year To Buy

One of the effects of the now burst housing bubble is the psyche of the potential homeowner. Is homeownership no longer a desired dream in America after someone experiences foreclosure? Are young people less likely to want to own a home when they see their parents lose their home to the bank? Is the American dream of homeownership dead? Here are the top 10 reasons why you should buy in 2011.

1. Save money: It may be cheaper to own than rent.  Your mortgage payment may be less than your rent payment. See your loan officer for details.

2. The real estate website Trulia.com recently conducted a study on the “Top 10 Cities to Buy vs. Rent.” They studied the top 50 cities by population and came up with this list of the top 10 cities where it is more affordable to buy versus rent:

1. Minneapolis, MN
2. Arlington, TX
3. Miami, FL
4. Fresno, CA
5. San Antonio, TX
6. Mesa, AZ
7. Jacksonville, FL
8. Phoenix, AZ
9. El Paso, TX
10. Las Vegas, NV

3. Affordability: Many buyers who could not afford to buy a home a few years ago can now afford to buy.  The Greater Phoenix median purchase price level is close to what it was in the year 2000.

4. Interest rates are low! Save money!  The lower the interest rate the lower the monthly house payment.

5. Save on taxes: If a buyer itemizes on their federal tax return they can deduct mortgage interest and property taxes.  Taking the tax deductions may mean the effective cost of owning is less than renting.  For example, if someone paid $12,000 in mortgage interest in a year and were at a 25% federal tax rate, they may receive up to a $3,000 annual tax deduction.  (The buyer needs to see their accountant as to which is better for them: itemizing deductions versus taking the standard deduction before buying).

6. Supply: A home buyer has so many choices!

7. Negotiating power: Since it is a buyer’s market, the seller often will pay many of the buyer’s closing costs and prepaids.

8. If you previously owned and lost your home to a short sale or foreclosure you may be able to buy again and don’t know it. See your loan officer for details.

9. Home ownership means a place of your own and place to put your own stuff!

10. Someday home prices will go up again!