Rent or Buy? Part 2

By Nef Cortez

Nef Cortez

Part 1 of “Rent or Buy?” written last week covered some general factors that most people consider when deciding whether to buy or rent. I promised to provide in more detail what some of these factors are, and how they might impact you when considering renting or buying a home. According to Attom Data Solutions, buying is more affordable in 66% of the markets surveyed across the country. The major reason for that is that rents continue to rise, and although home prices are also rising, the historically low fixed interest rate on home mortgages continues to make owning affordable. 

As the Federal Reserve continues to push rates upward, and eventually long term mortgage rates rise, many will be convinced to lock in their long term interest rates on their home purchase this year.  Daren Blomquist, senior vice president of ATTOM Data Solutions was quoted in a recent report in which he said  “ While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017.”  He continued “In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year. Additionally, renting may end up being the lesser of two housing affordability evils in a growing number of high-priced markets.”

 This “push” to homeownership is based on the benefits of ownership and the negative consequences of being left out. These benefits summarized are: 1)  The stabilization of the cost of housing by locking in a long term fixed interest rate loan,  2) The pleasure and enjoyment of being able to customize one’s space, because they own it,  3) Owning a home has a forced savings component built into it, which is a long term benefit to the owner, 4) The tax deductibility of interest payments and the property taxed paid is another benefit and makes home ownership more affordable,  5)  Appreciation of real estate in the face of inflationary pressures protects a homeowner’s cash investment in the form of a down payment and allows for leveraged appreciation of the investment, and allows for the growth of an equity investment in the property.

Currently, in most cases, the benefits of buying outweigh the risks of doing so, and are providing the impetus for many to make the leap into homeownership in 2017.

This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at  Please feel free to email any questions regarding real estate.

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