With mortgage rates hitting record-lows and a larger market inventory than ever before, potential buyers can be easily persuaded by a glorified image of property ownership. While buying is a practical and obvious decision for many, others are finding themselves hesitant to enter the volatile world of mortgages, interest rates, and property values. At LuxHomesDenver.com, we understand that the process of choosing to buy or rent is a complex and deeply personal issue but we have outlined a few popular reasons why we feel renting may be the best option for you!
1. It is often still cheaper to rent than to own the same size and quality of house, in the same school district. In more affluent areas, annual rents are on average 3.5% of the purchase price while mortgage interest rates linger at approximately 5%, so it costs significantly more to borrow the money as it does to "borrow" the house. Moreover, total owner costs- including taxes, maintenance, insurance, association fees, and utilities- can amount to about 9% of the total purchase price, which can easily override the tax benefits of owning. Therefore, buying properties in such areas currently poses fewer advantages than buying in evolving or developing areas, where property-values are still increasing.
2. Some buyers have already borrowed too much money and are now struggling to pay it back. They are finding themselves over their heads in houses that are now worth less than their loan value. This means lenders are actually facing bankruptcy, but since the banks have friends in Washington, they get special treatment that you do not. The Federal Reserve prints up bales of new money to buy declining mortgages from irresponsible banks, slowing down the buyer-friendly deflation in prices and socializing bank losses.
3. 'Boomers are retiring! There are 70 million Americans born between 1945-1960, one-third of whom have zero retirement savings. Their only viable option is the property equity they have built over time. Therefore, they must sell, adding yet another flood of houses to the market and driving prices down even more.
We hope you will find this information helpful in your decision-making process. Our team of real estate professionals is always happy to answer additional questions or address any further concerns you may have. Please view our current listings to see if occupying your dream home may be closer to reality than you think!
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