Today MarketWatch which is part of the Wall Street Journal Digital Edition came out with the story Millions waiting for right time to buy a home. They said “29% of renters are considering the purchase of a home within the next two years, according to the Hanley Wood “Housing 360 Survey,” which polled more than 3,000 people.” I think there are a lot of single family renters in Greater Phoenix whom would buy if they had proper information.
Do renters know interest rates are at an all time low? This should encourage renters to consider buying and not paying rent. In addition to low interest rates the report Least Expensive Cities in Greater Phoenix to Buy a Single Family Home shows that home affordability is low. The report assigns to 25 cities an own to rent ratio. The lower the ratio the more likely owning may be more affordable than renting. Below is a scale of the ratios.
I pulled two charts from the Least Expensive Cities report. The first chart shows the median single family purchase price for Greater Phoenix for the last twelve months of August. The second chart shows the own to rent ratio in Greater Phoenix for the last twelve months of August. Notice how similar the trend lines are when comparing the two charts. The own to rent ratio in August 2011 was the lowest for any month of August this century.
The low August 2011 own to rent ratio should motivate single family renters to see if they might save money if they owned. They should meet with their real estate agent and loan officer to compare how much they are paying in rent to how much they might pay monthly to own a similar home.
For an online copy of the report with the own to rent ratios for the 25 cities go to the Phoenix Business Journal site http://www.bizjournals.com/phoenix/blog/business/2011/09/phoenix-better-for-home-buyers-than.html
For more information on renting versus owning and what it takes to own again after a foreclosure or short sale send me an email to FWilcox@gcta.com
Hope you find this information useful.
Fletcher Wilcox
Scale
Ratio of 1-15: Owning less expensive than renting.
Ratio 16-20: Renting makes more sense but buying may make sense depending on circumstances.
Over 20: Renting less expensive than buying.
Tags:greater phoenix, hanley wood, Home, home affordability, information, Least, least expensive cities, Low, low interest rates, phoenix business journal, purchase, Renting, scale, sense, trend lines, wall street journal
