We hear it all the time: now might be the best time in history to buy a house. But according to a new study by real estate data provider Trulia, now really might be the best time to buy. Their findings show that it’s more affordable to buy a home than to rent in the 100 largest metros in the nation.
However, that’s only the case if you plan to stay in the home for seven years, which is the average time Americans traditionally live in a home before moving.
Trulia conducted the study of key market factors impacting the cost of homeownership. Based on asking prices and rents from the summer, the company claims that, on average, buying is 45% cheaper than renting those top 100 areas. That’s a savings of $771 a month.
Trulia Chief Economist Jeff Kolko cites the faster pace of rent hikes versus those of home prices.
“Asking home prices have started to rebound and have risen by 2.3% year-over-year in August (3.8% excluding foreclosures); however, rents have risen more (4.7%),” Kolko notes. “This means that prices are lower relative to rents than they were a year ago.”
“But more importantly, mortgage rates have fallen,” he adds. The 30-year fixed-rate mortgage sits at 3.55%, hovering only six basis points above the record low average hit in July.
To calculate whether renting or buying costs less, Trulia assumes people can get a low mortgage rate of 3.5%, itemize their federal tax deductions, are in the 25% tax bracket, and will stay in their home for seven years.
Of course, this is all assuming that people have saved up enough for a down payment.
Are you using facts like these in your marketing materials? What other stats do you cite to entice potential customers?