To Buy or Not To Buy NAR brochure: renting can cost seven times more annually than owning
RISMEDIA, July 21, 2006—The brochure, “Why rent when you can buy?” challenges certain assumptions about renting versus buying and helps Realtors® evaluate with their clients and customers whether homeownership is right for them.
“Housing is a good investment, and owning a home makes sense for a lot of current renters, but many would-be homeowners are reluctant to take those first steps,” said 2006 NAR President Thomas M. Stevens, senior vice president of NRT Inc., from Vienna, Va.
“Given their experience with homebuyer concerns and insight into local markets, Realtors® can counsel consumers about their options and provide the information and support people need to begin their journey toward homeownership.”
The Federal Reserve Board estimates that homeowners have a net worth nearly 36 times more than that of renters. Over the past 10 years, the cost of rental housing in the United States has increased an average of 3 percent per year; average rents are projected to rise 4.1 percent this year alone. With a 3 percent annual increase, a current rental payment of $1,000 per month would increase every year and amount to $137,567 after 10 years, with no wealth accumulation.
In contrast, a $210,000 home purchased today with a downpayment of $10,000 and a 20-year fixed rate mortgage at 6.5 percent would cost a steady $1,100 per month and yield a net worth of $138,521 after 10 years, assuming an historic 4.5 percent annual appreciation rate.
“The decision to become a homeowner involves financial and emotional considerations,” Stevens said. “Our Realtor® members help millions of people into homes every year, one family at a time.” |
