As we head into spring, there’s some great news brewing in the housing market. But, don’t take my word for it, here’s what other news sources have to say.
First, the RE/MAX National Housing Report for March put it best: “For the first time in 18 months, home prices in February rose higher… Prices in the 53 cities surveyed by the RE/MAX National Housing Report rose by 1.1% over February 2011. Home sales were even higher, up 8.7% from one year ago. With a positive sales trend of 8 straight months above the previous year, it’s looking like 2012 will witness a very strong home-selling season.”
That should be enough reason to set off some fireworks. But, there’s more. The Huffington Post uploaded an article on the housing market in early April under the headline, “Renting a Home Costs 15 Percent More Than Buying One.” That turns common wisdom on its head, since historically renting a home has been as much as 10 percent cheaper than owning one.
Not anymore. Because of very low vacancy rates — at a ten year low — rental rates have skyrocketed. In fact, a recent report by the National Low Income Housing Coalition found that it would take a minimum wage worker 100 hours of work per week just to afford rent. Even the average American renter, making a little over $14 per hour, needs a 29 percent raise to be able to afford an average apartment and have enough money left over for other expenses. Ready to ask your boss for a 29% raise?
With mortgage rates still very low for qualified buyers, its clearly time to buy. The website rentorbuybaltimore.com recently compared the costs of buying a $200,000 home against renting a $2,000 per month apartment — not uncommon these days in the harbor neighborhoods. The results, according to a New York Times calculator, showed that after just two years buying was better than renting. After five years, buying that home saved nearly $64,000 over renting.
Buyers are returning to the Baltimore area home market in droves this spring. There are even multiple offers coming in on desirable homes. If you were waiting for signs that the housing crash was over, then this is your time.