In keeping with trends over the past few years, home buying again remains a cheaper option than renting. New data from a real estate firm indicates the potential for significant savings for homebuyers in the top 100 major metro areas in the US.
Where Buying a Home is Cheaper than Renting
In a study recently released by the real estate firm Trulia, homebuyers can save 37% on housing costs when compared to renting. The percentage is an average calculated from the savings found in the top 100 metro areas in the United States. In the state of Texas, the top four metro areas logged savings higher than the national average.
When comparing the costs of homeownership to renting in Texas metro areas, the cost was 40% cheaper on average in Austin, 47% cheaper in Dallas, 50% cheaper in San Antonio, and 53% cheaper in Houston.
To calculate the percentage savings, Trulia’s analysis factored in such things as closing costs, down payments, security deposits, rent appreciation, renter’s insurance and more on comparable properties. It assumed that new buyers would stay in their homes for at least seven years, put 20% down and got a 3.7% mortgage interest rate.
Buying is Cheaper, But Are You Ready?
The data from Trulia does indicate buying is cheaper than renting, but sometimes it doesn’t mean that NOW is the right time to buy for your financial situation. In order to be sure you are ready for homeownership, online publication Business Insider recommends the asking yourself the following questions:
1. Is your emergency fund separate from your down payment?
For buying a home, you can never have enough money in your savings account. It is important to remember that money for a down payment should be kept separately from any emergency fund. The emergency fund will come into use if you need more furniture, extra moving equipment, or decide to upgrade parts of your house.
2. Have you saved up more than the bare minimum for a down payment?
In the same vein, set a target amount of 20% of home cost to spend on the down payment and save that amount. Once you hit your goal, continue saving. Unforeseen expenses are common when buying a home, and if you are one the 50% of new, first-time homebuyers projected for 2017, typical costs which are expected by regular homebuyers, such a closing costs, inspection fees, and insurance, could come as a surprise.
In fact, First-time buyers are also 40% more likely to exceed the initial budget they set when buying a home, according to The Zillow Group Report. It’s always better to have some wiggle room.
3. Do you have a good credit score?
True, you can buy a home with a lower than ideal credit score, but you will pay for it. A low credit score can mean significantly higher monthly payments, which puts an obvious stress on your budget. Since credit scores can fluctuate, check yours early in the home buying process. If you don’t believe it is high enough, set a goal and work toward increasing your score before you apply for a mortgage.
Choose Coventry Homes for your Homebuilding Needs
If you are ready to begin your journey to being a homeowner, Coventry Homes can help to make your dream a reality. With more than 25 years of experience in the Houston, Dallas-Fort Worth, San Antonio, and Austin markets Coventry Homes has experience putting qualified buyers in quality homes.
Not only is home ownership more affordable, but new homes are built with features that also allow you to save money in other areas. All new Coventry Homes at built with features such as EcoSmart technology, allowing for an energy efficient new home that can help to save money on utility bills. Plus, all new homes from Coventry come with a warranty, allowing you to enjoy your home worry-free for a few years after purchase.
Contact a sales counselor today to learn more about constructing your new home with Coventry Homes.