Buying A Home Is Better Way to Produce Wealth Than Renting

According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Indexhomeownership is a better way to produce greater wealth, on average, than renting.

The BH&J Index is a quarterly report that attempts to answer the question:

Is it better to rent or buy a home in today’s housing market?

The index examines that entire US housing market and then isolates 23 major markets for comparison. The researchers at use a “’horse race’ comparison between an individual that is buying a home and an individual that rents a similar quality home and reinvests all monies otherwise invested in homeownership.”

Ken Johnson, Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states: "The U.S. as a whole is still in clear buy territory. The cities of Cincinnati, Chicago, Cleveland, and New York City are deep into buy territory."

Miami and Portland had been inching closer toward renting being the better option but have "pulled back from the edge." Johnson goes on to say, “that's a good sign for home pricing as it suggests prices are going to level off in these metro areas."

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

Rent keeps going up year after year, even though the average income has not raised much.  It's more affordable to buy than rent.

Do you know what happens to your purchase power when Interest rates go up even just 1%?  Your buying power goes down 10%...Meaning if you are approved to purchase a $200,000 house today at today's rates...when they go up 1% you can only afford $180,000....The problem with this is home values continue to rise, so you will end up in another neighborhood than you hoped.  

Don't Hesitate contact The J Team Fort Lauderdale today and schedule your home buyer's consultation at 954-235-3589!  Let us help you create a plan to purchase a home with tips on how to improve credit scores, reduce student loan payments and even student loan forgiveness!  There are so many solutions out there, we can help you find a solution that works to help you buy a home!

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