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follow Patrick 2018 May 8, 8:20pm
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In 16 of the 33 MSAs, it’s cheaper to rent than to buy a home, sometimes significantly so. The most extreme example is San Francisco, the most expensive city for homeownership. Monthly payments for a mortgage on the median-priced house with 3.5 percent down takes up 80 percent of the median borrower’s income. This is significantly more expensive than renting, where the borrower making the median income would pay 37 percent of that income in rent. The rent gap is nearly 43 percent.Other cities on the West Coast show a similar trend, though none as extreme as San Francisco. In Seattle, which ranks seventh in the cost of homeownership, renting is also the cheaper option. A borrower who buys a home with a low down payment there can expect to pay an additional 8.6 percent of their income on housing.
So, a person looking to buy my shack will be paying $6k + $1.9k + $0.5k = $8500 per month of complete waste (i.e.: not building equity at all)
$500/month maintenance on a house built in 1963. LOL delusional.
Not at all true, real estate always goes up. Ask the NAR.
bob2356 saysNot at all true, real estate always goes up. Ask the NAR.And, also according to the NAR, it's completely reasonable to pay $120,000 in commission when I sell my shack!
So, to "buy" with $0 down and interest-only loan:* the interest on a 4% loan is $7k/month, but "only" $6k/month if you consider (limited) home mortgage interest deduction* the property taxes on the house are $1900/month ($2.1M 1.1% / 12) the maintenance is probably $500/month (or more — this is a 55 year old house)Note that if you can afford the house, your income will be so high that you will not be able to take off any income tax deductions for the property taxes.So, a person looking to buy my shack will be paying $6k + $1.9k + $0.5k = $8500 per month of complete waste (i.e.: not building equity at all)The $8500/month figure to buy compares to a $4100/month figure to rent.