Another reason to be more optimistic about the US Housing market is affordability of purchasing a home. The theory is as buying a home becomes more affordable when compared with renting, Americans will be lured back to the real estate market.
Home prices declined about 30% nationwide since 2006 and some of the hardest hit markets fell as much as 55%. The dramatic price reduction logically assumes homes are more "affordable" then they were a few years ago.
A recent study by Deutche Bank measures affordability in two ways: share of income Americans pay to own a home; and the cost of owning versus renting.
The analysis shows homeowners now pay 9.8% of thier income in after-tax mortgage, tax and insurance; this compares with 17.2% at the peak in 2007.
Also, the study found that in 28 out of 54 major housing markets it's now cheaper to pay a mortgage and other major costs than to rent the same home. In the distressed US markets, the study found owning a home costs less than renting by a wide margin. For example, it is 34% less to own a home than renting in Atlanta, according to Deutche Bank. In Miami, the study states, the average rent is $1,031 per month versus $856 per month it costs to carry a ranch house or stucco cottage as an owner.
The recent increase in investors that I am working with seems to indicate there is a spread between rents and the cost to own.
If you are thinking of selling or buying a home, or require more information, please feel free to contact me. Please text me your e-mail address to the number below and I will provide information requested.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-247-3550
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
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