Scales to finally tip from renting to owning?
It seems like an old fashioned notion from a more settled time, the idea you could break even or maybe even save a few bucks by moving from renter to homeowner.
Now, in this time of plunging home prices, it appears this quaint notion, a thing of the past in the heady years before the real estate price bubble burst, is back.
An Associated Press analysis of 45 metro markets reveals a dramatic narrowing of the cost gap between owning and renting. In some markets, like Cleveland, St. Louis and Atlanta, the gap is $100 or below.
Three years ago the gap was $777 a month. Now it’s down to $221 – and falling.
That said, jumping into the housing market right now is a risk as well given the probability that prices will just keep on falling, albeit maybe at a slower rate.
There are some other good reasons not to jump in now as well.
Financial planners, apparently, would rather see young couples hold back and rent for a while longer, rather than jumping into a declining market, according to a recent piece in the Investment News.
With prices falling, the danger is you could get stuck in that starter home for years to come, long after you have outgrown it.
Better to wait a few more years and save up more money until aging Baby Boomers start to unload larger, three to four bedroom homes, planners advise.
Sounds like admirable advice, though how practical that is for most people, I am not sure.
The dream of homeownership may be tarnished, but it is still king.
