Although the gap between renting and buying is narrowing across the U.S., Columbia SC home buying is still 38% cheaper than renting according to Trulia's Winter 2014 Rent vs Buy Report.
Rising mortgage rates and Columbia SC home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing. Now, at a 30-year fixed rate of 4.5%, Columbia SC home buying is 38% cheaper than renting versus being 44% cheaper one year ago.
Columbia SC Home Buying Beats Renting Until Rates Hit 10.6%
Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting. Also, in some markets, rents have risen sharply; rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison.
Will renting become cheaper than buying soon? Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.
Columbia SC home buying becomes more expensive than renting if mortgage rates rise to 10.6%, and rates haven't been that high since 1989.
Of course, the cost of Columbia SC home buying versus renting depends on how much home prices rise (or fall) after you buy. Estimates assume conservative Columbia SC home price appreciation, but – as we all know after the last decade – Columbia SC home prices can unexpectedly rocket or plummet.
For more Columbia SC home buying tips, visit our Columbia SC Home Buying Tips link under our Columbia SC Real Estate Categories to the right.
Most people buying Columbia SC real estate are somewhat delusional in thinking they know something about what they are doing. The fact is, unless you've bought and sold a lot of properties, you probably fall into the category of knowing very little.
3 Things You Should Know When Buying Columbia SC Real Estate, But Don't
1. All Homes Have Problems – All houses have issues, some just have more than others. The shock usually comes when prospective buyers get their home inspection report back. Inspectors are professional pessimists, which is why we love them. But many issues only require simple and/or inexpensive fixes.
Most inspection reports will be 40 to 50 pages long, and most inspectors will take close-up, HD photos of problems. So while the actual listing shows gorgeous pictures of granite countertops, the inspection report will show awful pictures of a cracked driveway. By the end of the report you may be thinking the house is a total and complete lemon.
2. When Buying Columbia SC Real Estate, You're Making TWO Purchases – When you buy a home, you actually are making two purchases. You are buying the home, and you are buying the money to buy the home.
For every 1% rise in interest rates, home prices would have to fall by 10% in order for you to maintain the same monthly mortgage payment. And at the end of the day, that's what matters, the monthly payment. So take advantage of low rates; they add much more buying power to your purchase than low prices.
3. Always Be Thinking Resale – This piece of the Columbia SC real estate puzzle is something that all people buying assets should keep in mind: At some point you're going to sell it again and will want to maximize what you eventually get.
When you're buying a home, you're probably not thinking about the day you will have to sell it, but you will be thanking yourself one day if you remember those three little things you've always heard about Columbia SC real estate… location, location, location!
Keep these things in mind when buying Columbia SC real estate and don't make the same mistakes most of your friends and relatives will make.
For more tips and articles concerning buying Columbia SC real estate, click the Columbia SC Home Buying Tips link to your right under our Columbia SC Real Estate Categories.