US Housing Market Moving Further into ‘Buy Territory’
According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, the U.S. housing market has continued to move deeper into buy territory, supporting the belief that housing markets across the country remain a sound investment.
The BH&J Index is a quarterly report that attempts to answer the question:
The index examines the entire US housing market and then isolates 23 major cities for comparison. The researchers “measure the relationship between purchasing property and building wealth through a buildup in equity versus renting a comparable property and investing in a portfolio of stocks and bonds.”
Ken Johnson, Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors explains that:
“Housing prices, in general, continue to slow and when considered in light of the recent trends in the Buy vs. Rent Index signal that ownership remains an excellent investment for the majority of Americans.”
While 15 of the 23 metropolitan markets examined moved further into buy territory since last quarter, Dallas, Denver, and Houston are three of the major cities that are currently deep into rent territory. In these three markets, it is estimated that renting will top homeownership 7 out of 10 times.
Eli Beracha, Ph.D., Assistant Professor in the T&S Hollo School of Real Estate at FIU,believes that, in these three markets, the “strong odds in favor of renting to create more wealth should begin to have an impact on the demand for home ownership and from that, impact property prices in these areas.”
Simply put, home prices in these areas will begin to return to more normal levels once residents realize that renting may be a better choice, therefore bringing home affordability back as well.
The majority of the country is strongly in buy territory. Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year. Protect yourself from rising rents by locking in your housing cost with a mortgage payment now.
To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.
Petra Quinn is a trusted Real Estate Professional and a recent Graduate, Realtor® Institute (GRI) with over 11 years experience in the Real Estate Business; specializing in listing and selling residential real estate on both sides of the Chesapeake Bay Bridge, in Anne Arundel & Queen Anne’s County, from luxury homes to more modest dwellings. Petra is also a member of the Kent Island Estates Community Association, past BNI® president, member and visitor host committee member, as well as an active committee member at MidShore Board of Realtors®. You can reach Petra best on her cell phone at 443-600-1986, or via email Petra@EXITGoldRealty.com. EXIT GOLD REALTY is located at 115 Pullmans Crossing Road, Grasonville, MD 21638. The broker, Debbie Houck, can be reached at the office 410-643-4111.