Rent vs. Buy | What's Better in Montgomery County Maryland? 

 

This a question that needs to be answered more on a personal level rather than a published general advice that tries to fit everyone. 

 

Should you buy or rent a place? 

If you live in Montgomery County MD, you should take into consideration the appreciation of real estate in the area. This is paramount for your decision in simple terms. 

If property values are rising, certainly buying would be better for you 

If property values are declining or stagnat...then renting could be a better option for you.

In Montgomery County, there are no pockets of neighborhoods where the property values are declining. The economy in our area has always remained strong and this is the best argument fo you to realize that buying may be a better option for you...if you want to live around these parts.

 

There is absolutely no reason why anyone who has decent employment and wants to buy a home today. .couldnot do it.

The reason why people say buying is better than renting is simply because it is true in our area. You need to understand that you are paying a mortgage anyway.

You are better off paying your own mortgage... that your landlord’s! 

 

Now, let's talk about the real truth behind the rent vs buy debate for the rest of the country. 

 

In a blog post published last Friday, CNBC’s Diana Olnick reported on the latest results of the FAU Buy vs. Rent Index. The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers at FAU use a “‘horse race’ comparison between an individual that is buying a home and an individual that rents a similar-quality home and reinvests all monies otherwise invested in homeownership.”

 

Having read both the index and the blog post, we would like to clear up any confusion that may exist. There are three major points that we would like to counter:

 

1. The Title

 

The CNBC blog post was titled, “Don’t put your money in a house, says a new report.” The title of the press release about the report on FAU’s website was “FAU Buy vs. Rent Index Shows Rising Prices and Mortgage Rates Moving Housing Markets in the Direction of Renting.”

Now, we all know headlines can attract readers and the stronger the headline the more readership you can attract, but after dissecting the report, this headline may have gone too far. The FAU report notes that rising home prices and the threat of increasing mortgage rates could make the decision of whether to rent or to buy a harder one in three metros, but does not say not to buy a home.

 

2. Mortgage Interest Rates are Rising

 

According to Freddie Mac, mortgage interest rates reached their lowest mark of 2017 last week at 3.89%. Interest rates have hovered around 4% for the majority of 2017, giving many buyers relief from rising home prices and helping with affordability.

While experts predict that rates will increase by the end of 2017, the latest projections have softened, with Freddie Mac predicting that rates will rise to 4.3% in Q4.

 

3. “Renting may be a better option than buying, according to the report.”

 

Of the 23 metros that the study reports on, 11 of them are firmly in buy territory, including New York, Boston, Chicago, Cleveland, and more. This means that in nearly half of all the major cities in the US, it makes more financial sense to buy a home than to continue renting one.

In 9 of the remaining metros, the decision as to whether to rent or buy is closer to a toss-up right now. This means that all things being equal, the cost to rent or buy is nearly the same. That leaves the decision up to the individual or family as to whether they want to renew their lease or buy a home of their own.

The 3 remaining metros Dallas, Denver and Houston, have experienced high levels of price appreciation and have been reported to be in rent territory for well over a year now, so that’s not news…

 

Beer & Cookies

 

One of the three authors of the study, Dr. Ken Johnson has long reported on homeownership and the decision between renting and buying a home. The methodology behind the report goes on to explain that even in a market where a renter would be able to spend less on housing, they would have to be disciplined enough to reinvest their remaining income in stocks/bonds/other investments for renting a home to be a more attractive alternative to buying.

 

Johnson himself has said:

 

“However, in perhaps a more realistic setting where renters can spend on consumption (beer, cookies, education, healthcare, etc.), ownership is the clear winner in wealth accumulation. Said another way, homeownership is a self-imposed savings plan on the part of those that choose to own.” 

 

Bottom Line

In the end, you and your family are the only ones who can decide if homeownership is the right path to go down. Real estate is local and every market is different. Let’s get together to discuss what’s really going on in your area and how we can help you make the best, most informed decision for you and your family.

 

The Clarksburg Maryland real estate market is uniquely hyper-local, meaning that you can't  throw the latest sales numbers within local/national levels and expect meaningful results about its condition.

Buyers should be very observant about the trends and direction of the market before putting an offer for a house.

 

Our agents are ready to help all your real estate needs 

 

To reach us, please call 301-246-0001

or send us an email  info@ReallyNiceHomes.com

 

Search for the newest listings in Clarksburg by map (click picture below) 

 

 

Thinking of selling your home? Let Fernando take over the marketing of your property with our unique 99 STEPS system 

www.99SOLD.com - Call or text 240-426-5754 for more information.