If you’ve ever considered purchasing a condominium, townhome, or single-family home for your personal residence, the stars have aligned. Interest rates are low and rental rates are rising. If you find yourself wondering which path to take, Surge Homes is here to help you realize the advantage and opportunity of home ownership.
Houston leads the nation in new housing construction, signaling the demand to not only live in this great city, but to own a piece of it. Houston Business Journal outlines the black-and-white reality by sharing the fact that, for many urban professionals who rent, buying a home can prove to be a much wiser and fiscally advantageous prospect. Here’s a quote from the above mentioned article:
“In Houston, the average home buyer can expect to spend 11.7 percent of their income on a home mortgage payment, while renters can expect to spend 29.4 percent of the monthly income on rent, according to Zillow.”
While the article explains that the 11.7 percent doesn’t include insurance, maintenance, and property tax, the figures still demonstrate the home owner advantage.
If you need more proof, check out this handy tool from Trulia. Using this rent vs. buy calculator, you can compare mortgage and rental rates based on a particular city. Let’s populate the chart with these figures:
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City: Houston
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$1,500 monthly rent
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$200,000 target home price
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plan to live there for 7 years
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28% tax rate (based on an income of $87,000+),
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5% interest rate for the mortgage
With a click of a button, Trulia does the math and tells us it is 30 percent cheaper to buy a home in Houston than to rent one.
Houston’s New Wave of Buyers
The question then becomes, who should take advantage of home-buying opportunities? Everyone, from millennials to baby boomers and families to single professionals. Here’s why: HBJ reports that in Houston, renting now costs 31.2 percent more than it did before the recession, while the inverse is true for home ownership, meaning, it now costs an average 20.7 percent less to buy a home. However, the longer a person rents, the further away home ownership may be.
According to the article, sky-high apartment rents may mean it’s harder for millennials to save for a down payment and the initial costs of home ownership. Millennials, who have long been considered one of the largest multifamily populations, are well advised to buy now, rather than wait. For most cities across the United States, home buying continues to soar past renting in terms of monthly costs. This article from Zillow explains that, “those who can come up with a down payment are better off buying, in terms of affordability.”
In other words, this revered adage is more accurate now than ever: “Why put off tomorrow what you can do today?” Especially when down payments necessary to purchase a home can be as low as 5%.
The demand for home ownership is just one of the many reasons why Surge Homes has set out to build condos, townhomes, and single-family residences in prime neighborhoods across Houston. With homes priced from $150,000 to $1.5 million, there is something spectacular for everyone. As rental rates increase, investing in home ownership is not only exciting today, but quite prudent for the future.
Contact us to learn more about our homes, and help us build Houston. We invite you to visit us in person at the Discovery Center. (You can even book your in-person appointment online here.)
Photo Credit: brian.ehlinger via Compfight cc
