As rental rates increase it makes more sense than ever to buy

By
Real Estate Agent with Prudential Northwest Realty

It occurred to me that I don't hear much about inflation when it comes to the debate to buy or not to buy. We always point out the tax benefits, the equity growth and the pride of ownership. But, when educating buyers on the benefits of home ownership, rarely does the effects of inflation come up.

Over the last year, rental rates have been increasing. New rental units are not being built. Those homeowners that have had to sell their home on a short sale or faced foreclosure have had to turn to renting. An increase in renters and a stabilization of supply of rental units has caused vacancy rates to diminish and therefore rental rates to increase. I hear it all the time from my clients that contact me about buying their first home. The decision was often spurred by a notice from their landlord that rent was increasing.

So, if you're in the position to do so, why not buy a home with a 30 year fixed rate mortgage and essentially lock in your housing payment for the next 30 years? No chance of those yearly rate increases. Now, let's not forget the increases in property taxes, and home maintenance, but when coupled with all the aforementioned benefits of home ownership already, those are minimal in the big picture.

Now think about inflation. It happens. Minimum wage usually increases right along with inflation, so your pay, along with natural promotions and growth in your career, will be increasing over the next 30 years. Your housing payment esentially stays the same. Therefore it would seem that your housing payment actually becomes cheaper over the years!

Despite the doom and gloom about the housing market out there, we are already seeing a dramatic shift in the market. Home prices will start increasing and we will be back to a more normal national average of 7% equity growth per year. So not only are you locking in your housing payment, but it's an appreciating asset and is building you wealth over time.

Why not take advantage of the historically low home prices and interest rates to buy the most affordable home at the lowest cost today. Trust me, you will kick yourself 10 years from now for not making an informed decision to buy today!

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Location:
Washington
Tags:
rent increases
tax benefits of homeownership
inflation

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Rainmaker
63,165
Michael Ford
Coldwell Banker Heritage Homes
Carrue I agree with you 100%.
April 03, 2011 01:00 PM
Rainer
29,997
Virginia Gingras
West USA Revelation

These sure are good reasons to buy instead of rent.  Now if only the lenders would come up with a way to give them a mortgage!

April 03, 2011 01:06 PM
Rainer
14,538
Lisa Salems
North Shore Realty Team, Inc.

Great insight!  I agree now is the time to buy with rent's increasing. 

April 03, 2011 02:17 PM
Anonymous
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Rainer
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Carrie Foley

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