Renting’s great in certain situations, but if you’re serious about spending your money wisely, buying a home is a much better call. Monthly mortgage payments often cost less than rent, and you may just get a much better space for your money. In Austin, the housing market especially favors buyers, who can see a huge return on their real estate investments in just a few years. But you don’t have to take it from us. Here’s what the statistics say about buying a home in the Austin area.
Survey Says: Buying Costs Less
Many people erroneously believe that renting is cheaper than buying a home. Houses are expensive, after all! But when you look at the long-term cost of living, things look a little different. A study from GoBankingRates.com found that in 42 states throughout the US, rent is actually a lot more expensive than mortgage payments. (In Texas, it’s about $154 more per month, for instance.) Real estate listing site Trulia offered its own research on the matter and found that buying was significantly more affordable than leasing a rental unit, especially for respondents aged 24 to 35, for whom a mortgage payment was almost 25% less expensive. Basically, the results all point to buying a house as the smartest financial strategy.
Rental Rates on the Rise
Some of those savings can probably be explained by the soaring cost of rent. In the past year, rents rose an average 2.8% across the country — the sharpest hike since May 2016. That trend is particularly evident in the Austin metropolitan area, where median rent prices have nearly doubled since 1980. It’s hard to predict what will happen to the rental market from year to year. But by the looks of it, we won’t be experiencing realistic rent reform anytime soon. When you buy a house, you have the option to choose a fixed-rate mortgage, which means you’ll be locked into the same payment structure regardless of how the housing market fluctuates. Even if you don’t opt for a fixed rate, you can typically refinance your mortgage to obtain a better rate down the line. Basically, when it comes to the housing market, the cards are stacked against renters.
Mortgage Rates Remain Low
Mortgage rates, on the other hand, have remained fairly steady for the last few years. Since 2011, mortgage rates have hovered below 4.5% (though interest rates have been on the rise lately, so if you’re thinking of buying a house, it might be a smart idea to do it now while they remain relatively low). If you opt for a fixed-interest rate on your mortgage loan, you’ll be locked into the rate throughout the life of your loan, meaning your annual interest rates will not fluctuate over time. You won’t have to suffer at the whims of market forces, like you might if you rented.
A Home Is a Long-term Investment
Another financial advantage to a home is its worth: if you invest in your home, improving and enhancing it throughout your time there, your home could turn into a valuable investment should you choose to sell. Unlike a car or other major purchase, homes tend to appreciate in value, meaning they’re often worth more when you resell. Here, Austin property rates work in your favor — not against you, as they do when you’re renting. Homes in this area have appreciated at an average rate of 4.91% each year since 2000. And that trend is not likely to drop off anytime soon. In fact, in just the last year, Austin homes appreciated at a rate of 9.3%, adding an average $24,353 to their worth. At the end of the day, buying a home in Austin looks to be a smart investment.
It’s Easier to Get the Home You Want When You Purchase
At some point, living in a huge, multi-unit apartment tends to lose its appeal. After a succession of noisy neighbors on the other side of the wall, a single-family home starts to look downright idyllic. The problem is, finding one of these spaces for rent can be difficult. There are far fewer homes for rent than there are homes for sale — unless you want to spend thousands per month in rent, of course.
You may find it much easier — and affordable — to find your ideal home if you decide to buy. This is especially true if you opt for a custom home, where you can design the floor plan and features to your exact liking. You can add in any kind of room or architectural design element, and building a custom home is often less expensive than purchasing an equivalent home for sale.
So if you’re ready to stop spending money to fund your landlord’s new car, contact us today for more information. Your next home awaits!