Renting may cost seven times more annually than owning, according to a newly revised consumer education brochure from the National Association of Realtors®. The brochure, "Why rent when you can buy?" challenges certain assumptions about renting versus buying. "Housing is a good investment, and owning a home makes sense for a lot of current renters, but many would-be homeowners are reluctant to take those first steps," said 2006 NAR President Thomas M. Stevens. "Given their experience with homebuyer concerns and insight into local markets, Realtors® can counsel consumers to begin their journey toward homeownership. " The Federal Reserve Board estimates that homeowners have a net worth nearly 36 times more than that of renters. Over the past 10 years, the cost of rental housing in the United States has increased an average of 3% per year; average rents are projected to rise 4.1% this year alone. With a 3% annual increase, a current rental payment of $1,000 per month would increase every year and amount to $137,567 after 10 years, with no wealth accumulation. In contrast, a $210,000 home purchased today with a down- payment of $10,000 and a 30-yr. fixed rate mortgage at 6.5% would cost a steady $1,100 per month and yield a net worth of $138,521 after 10 years, assuming an historic 4.5% annual appreciation rate. This doesn’t even take into account the tax benefits of owning versus renting!
In light of the above facts and figures why do you suppose anyone would willingly choose to rent? We would like to know your thoughts and encourage you to please post your comments to our Blog. For consumers, be sure to visit our website www.PinehurstHomeTeam.com and take advantage of our on-line consumer education series.
Thanks for your consideration and participation.
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