To buy a new home or rent? That is the question. Read on to learn what the experts are saying? Do their findings apply to the quiet and beautiful area we call Lebanon County, PA?
As I attempt to track trends in the U.S. housing industry, I have recently come across several articles pertaining to the question: should I rent or buy a home? According to CNN Money, if you live in Boston, New York or Dallas renting is preferable. On the other hand, some cities like Atlanta, "top the list with average monthly rent of about 50% more than the average after-tax mortgage payment." You may have to read that again to let the numbers sink in. Imagine paying 50% more to rent.
In the CNN Money article entitled: "Buy vs. Rent: These days, Buying Wins", two reasons are cited as to why buying a home now may be better for you continuing to rent.
- First, rents have been stagnant for the past few years and are expected to head higher. In fact, the article shared about Peggy Alford, president of Rent.com, who cautions renters that they could see a 7% increase in their rent over the next two years.
- Secondly, on a national scale, home prices are down by 32% since they peaked in 2006.
Buy or Rent in Lebanon County, PA?
So let's say you live in Lebanon County, PA and are trying to figure out if you are better off renting or buying a new home. I wanted to find out the answer myself and so I tried to do a little research and went to Trulia.com's Calculator for figuring out when it is to my advantage to buy. See Mortgage Calculator - The problem I had with the calculator was putting in the right numbers. However, with that said, if I planned on staying in a home for a while it was always to my advantage to buy a home rather than rent.
TIP: Ask a Mortgage or Real Estate Professional you trust to help you work through the correct numbers.
Secondly, I went to Zillow.com to get an idea of house prices in Myerstown, PA. As you can see from the chart below, prices are beginning to rise. If you build a new home and lock in on a mortgage you know what your fixed costs are going to be for a while. If the prediction that rent is going up by 7% comes true, then buying a home now becomes the preferable option.
Happy New Home Hunting!