The decision to buy a home depends on many influencers that can affect people in different ways. For some, it may have to do with where they are in their careers, how much they are making and whether they feel ready to take on a mortgage. For others, it can be a decision based on family, whether that means taking care of aging parents or welcoming new members into a growing household.
While there are plenty of personal reasons that come into play when making this very important decision, the market should also be taken into account. Sometimes, buying a home in a market that has unusually high rent prices is actually the most cost-efficient move.
“In the majority of states, it’s significantly cheaper to buy.”
The rent-to-buy comparison is different depending on where in the country you’re looking. In general, buying is the more economic choice. According to a report by GOBankingRates, there are only six states where renting is cheaper than buying. In the majority of states, it’s actually significantly more expensive to rent than it is to buy.
Ohio is for buyers
Ohio was identified as one of these states where buying is significantly cheaper than renting and the National Association of Realtors agrees. In a list of the top 10 markets where renters can afford to buy, three were located in Ohio: Toledo, Columbus and Dayton.
There are two primary indicators that determine whether it’s cheaper to rent or buy: rent prices and home prices. Ohio’s median rent prices have climbed 5.4 percent over the past year, GOBankingRates pointed out. At the same time, the report found that Ohio has the lowest monthly mortgage cost.
Based on employment growth, household income levels, and rent and home prices, NAR found that:
- 46 percent of renters in Toledo can afford to buy
- 44 percent of renters in Dayton can afford to buy
- 38 percent of renters in Columbus can afford to buy
An analysis by Trulia found that two Ohio cities have continued to improve over the past few years. In 2012, it was:
- 31 percent cheaper to buy than rent in Cincinnati
- 25 percent cheaper to buy than rent in Akron
Markets continued to improve over the years, and in 2015, buying a home in these two markets was 34 and 31 percent cheaper to buy than rent, respectively.
Falling for Florida
Another state in which it’s dramatically more financially friendly to buy homes than to rent is Florida. Population in the southern part of the state has been on the rise, pushing rent prices higher. Miami in particular is one of the highest-rent areas in the country, and many find they need to take in roommates to split the rent just to make it affordable.
According to an analysis by Trulia, buying a home in Miami is 43 percent cheaper than it is to rent. But Miami isn’t the only place that homes are a financially friendly option. According to the NAR:
- 41 percent of renters in Lakeland, Florida, can afford to buy
- 38 percent of renters in Tampa, Florida, can afford to buy
Trulia also found that Tampa renters who choose to buy can see 42 percent savings. Fort Lauderdale renters can save 44 percent by buying as well.
There are many benefits to being a homeowner as opposed to a renter, but NAR Chief Economist Lawrence Yun pointed out that the effects of the Great Recession are still taking a toll on many people. This is a prime reason why homeownership is at its lowest level since 1965, but data such as this provides hope for those who want to become homeowners and for the real estate industry as a whole.
For more information about the financial details of buying a home, contact the experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind.