Are you weighing the pros and cons of renting vs. buying? As Austin home values continue to rise, I’m often asked by prospective buyers if they should wait till the market turns to buy. Truthfully, no one can predict what the market will do. However, these days, my advice is usually no. Everyone knows Austin is amazing. More people are moving here every day. We have a healthy local economy full of growing businesses. We have a great culture, and beautiful outdoor spaces. We have universities that attract students, who often stick around - choosing to call Austin home. All of these reasons result in a steady influx of Austin residents, and the available housing stock struggles to keep up with demand. There once was a time when I told people who were considering renting for another year to go ahead and renew the lease, call me when you’re ready to buy. That time has passed.
If you can afford to buy a home now, do it. Even if you have concerns about how long you will live in it, you can likely sell for a profit a few years down the line or rent it out while you wait for it to appreciate more. I have worked with a handful of sellers this year who only purchased their homes a few years ago and profited more than 50K when they sold. One of these clients even used a USDA loan and bought the property with 0 down. Do you think these people considered renting? Absolutley, but ultimately they ended up buying and they are greatful they did.
If you’re still on the fence, consider these market trends. The median sales price for a home in the city of Austin was $395,000 in May of 2017. The median price for an Austin home in May of 2016 was $364,978. From 2013 to 2017 the median sales price for Austin homes has increased well over 100k. Imagine what the median price will be if you keep renting and finally end up buying a place in Austin in 2021.
Interest rates are expected to rise. Interest rates have been extremely low recently, and experts agree they are likely going to rise in the near future. A 1% increase in your mortgage rate equates to about 40k for a 30-year mortgage on a 200k property. If you’re considering buying in the near future, you should discuss locking in your rate now.
If rising home prices and interest rates still haven’t convinced you to dive head first into the home buying process, consider this. If you're renting and pay $1,500 in month for 4 years, you have paid your landlord $72,000. Consider this coupled with the appreciation stats mentioned earlier and you can see how there is no better time than now to take the plunge and buy some Austin real estate! If you want more information on renting vs. buying in Austin, TX you can use this rent vs. buy calculator from The New York Times.
This post originally appeared on shesellsaustin.com