Cost of Renting VS Owning a Home in 2013
To rent or to own, that is the question. For younger people out there who have never bought a home before, you might be wondering if it is better to rent or buy. With the ever changing real estate market, many may feel that renting is less of a risk or less expensive when you factor in such costs as home repairs, taxes, HOA fees and much more.
According to the US Census, in the last 32 years home prices have risen 3.5 times but loan rates are at historic lows making the cost of buying a home in 2013 almost as cheap as in year 1981. Rental costs, on the other hand, according to Zillow, have increased up to 4 times.
The average home price in October of 1981 was $69,600 whereas in February of 2013, the median home price was $246,800. In October of 1981, with an average home price and a typical home loan, the monthly mortgage payment was $967 P&I. The average monthly rental cost at the time was only $315.
In February 2013, with an average home price and a typical home loan rate of 3.53%, a monthly mortgage payment would be $1,115 P&I; however, if you were to rent that same home, rent would run you about $1,350 per month. Renting is now becoming more expensive than owning your own home.
If you are not worried about the responsibility and monthly mortgage payment that comes with owning a home but you think can’t qualify because you don’t have money for a down payment, as a first-time home buyer, there are a lot of options.
San Diego offers a down payment and closing cost program which according to the county`s official website, the program “…offers low-interest deferred payment loans of up to $70,000 or 33% of the purchase price whichever is less for low-income first-time home buyers.”
The purchase price of the home must be lower than $451,250 and must be in an unincorporated area of San Diego. Oceanside real estate, for example, would not qualify for this program because it is an incorporated city, however, if you check with the individual, incorporated cities, they typically have similar programs.
For a list of incorporated and unincorporated cities in San Diego, Calif., please click here.
Other qualifications do need to be met for this program, for more information please click here.
FHA loans are also typically great for first time home buyers; however, they are not limited to first time home buyers and tend to have more laid-back requirements. Borrowers do have to have at least a 620 FICO score and they are required to have mortgage insurance for five years.
For more information on first-time home buying, home buying in general, home selling and other real estate inquiries, contact Kim Carlson at (760) 434-6873.