Anyone looking for a home will probably asking themselves, “is buying better than renting? or vice versa?” While each have pros and cons, the recent market may have an answer: buying is better. The latest national index produced by Florida Atlantic University (FAU) and Florida International University indicated this. Housing markets across the country seem to be healthy. Home prices are rising nationally.
“This appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds,” says Ken Johnson, Ph.D., a real estate economist, one of the index’s authors and an associate dean of graduate programs and professor in FAU’s College of Business.
Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index specifically measures buying vs. renting. It compares the potential wealth from purchasing home with a renting a comparable home while investing in stocks and bonds. 16 of the 23 major metropolitan markets studied were in the buy territory.
One of the cities in an what the authors call an “indifference” point was our own Miami. This means there is no obvious answer when asking is buying better than renting? However, the BH&J index did move further towards ownership in this quarter.
“This movement suggests that most consumers in these markets appear to have learned from the real estate crash and now understand that residential property prices can get too high,” Eli Beracha,Ph.D., co-author of the index and assistant professor in the T&S Hollo School of Real Estate at FIU said. “This is a good sign for future housing price stability in these markets.”
Most of the country is either in or headed towards a buying type of market. At RE/MAX Paradise, we have many amazing properties available to rent or buy. However, contact one of our agents today for expert advice on making the right choice.