Even as the U.S. real estate industry recovers and home prices continue to rise, recent data reveals that owning a house is still less expensive than living in an apartment, so folks who have been thinking about purchasing property may want to consider this financially sound decision.
According to real estate research group Trulia, buying a home is 44 percent cheaper than renting an apartment. This is down from 46 percent at this time last year. The company's chief economist, Jed Kolko, stated that property prices are expected to increase steadily in 2013, meaning that a year from now purchasing a house may become more expensive than residing in an apartment.
With this information in mind, now may be a good time for prospective homebuyers to upgrade from renting to owning, particularly in areas of the country like Detroit, Michigan; Cleveland, Ohio and Gary, Indiana, where the buy-rent gap is the largest.
"People who didn't buy a home last year may have missed the bottom of the market, but they haven't completely missed the boat," Kolko said. "Even buyers who can't get today's lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets – so long as they can get a mortgage in the first place."
As the housing market continues to improve and spring – one of the busiest times of the year for the industry – approaches, there is a good chance that more people will begin buying and selling homes. It's important, as always, for lenders to ensure that borrowers can stay on top of their monthly payments, and they can do so by investing in loan management software.