While reading some articles on the real estate section of MSN.com, I ran across an interesting ranking titled, “66 cities where buying makes sense“. According to research from the National Low Income Housing Coalition and the Center for Economic and Policy Research, the Virginia Beach, Norfolk and Newport News area has ranked among the top 66 cities where it is a good idea for those with good enough credit to make the switch from renting to owning their own home.
According to this article, in 57 of the 100 most populous metro areas it is more expensive to rent a 3-bedroom apartment than it is to buy a typical low-priced home with a 6% loan. A low-priced home in this case is one that is priced at 75% of the area’s median price. The article also states that if someone were to buy a low-priced home in the Virginia Beach, Norfolk or Newport News, they would build $10,449 dollars in equity by 2012, considering they were approved for a 6% loan. If some one could only qualify for 7 or 8% interest, they would build $8,515 or $6,842 worth of equity respectively.
It is important to note that this does not mean it is a good time to buy a house as an investment, but rather that those who qualify for low financing could potentially save money every month by paying a mortgage on a low-priced home as opposed to renting. Another upside is that they could build some equity over the next 3.5 years. Depending on your credit score and current rent expenditure, you could pay less per month by buying a low-priced home than renting a three-bedroom apartment.
The National Low Income Housing Coalition and the Center for Economic and Policy Research have put out a report entitled, “Ownership, Rental Costs and the Prospects of Building Home Equity, An Analysis of 100 Metropolitan Areas“. Anyone who is going to weigh the pros and cons of buying versus renting should take a look at this short report before deciding which is the better route for them.
When deciding whether you should buy a house, you should consider all of the variables. Each case is different, while it may be a good time to buy for some, for others it could be a better idea to wait a bit. Before you make the important decision to buy or wait for market conditions to improve, be sure to get all of the information that you need to make a sound decision.