Abberly Place Apartment Homes

500 Abberly Crest Boulevard, Garner, NC 27529
Call: 866-526-0879 Email UsAbberlyPlace018@myLTSMail.com View Map

Opens: Monday-Friday: 9A-6P | Saturday: 10A-5P | Sunday: 1P-5P

Apartments Raleigh NC Blog

Renting is Cheaper! – Garner, NC

Joseph Coupal - Friday, September 23, 2016

Despite historic-low mortgage rates, it's still cheaper to rent than own in most major U.S. cities. Low inventory, foreign investors and flippers are keeping home prices up.

With interest rates hovering near historic lows, it might seem like the ideal time for renters to jump into the homeownership market and perhaps spend less money each month to own a home than they do to rent one. But a new report shows that scenario may be more fantasy than reality - at least in the country's biggest markets.

The average monthly cost of owning a home is 28% higher than renting in major U.S. markets.

Of 28 U.S. markets surveyed, only four showed it was cheaper to own a home than rent one.

Home prices have gotten close to what we saw at the peak of the market. The magnitude of home price increases has been higher than rental increases.

The study focused on four- and five-star properties in the rental and homeownership markets to ensure an apples-to-apples comparison and to address the surging demand for housing in major cities.

Younger generations just don't want to commute like past generations have - they want to live in cities, near restaurants and bars, where they can work and play in the same area. While there's a lot of affordable housing in the suburbs, that's just not where people necessarily want to live.

So, the study compared the average monthly rent of a high-end apartment with the monthly cost of owning a one-bedroom condo in that city or a three-bedroom single-family home in a low-crime suburban area. The monthly cost of homeownership assumed a 15% down payment on a 30-year fixed rate mortgage, and included taxes, home insurance and PMI.

However, the other 24 markets were more costly to own than rent, with 15 of them being at least 20% more expensive.

Los Angeles showed the biggest dichotomy, with the average cost of owning a home being 39% higher than the average monthly rent. This was followed by Austin, Seattle, Nashville, San Francisco, San Jose, New York/New Jersey/Connecticut, Dallas/Fort Worth, Charlotte, Houston and Orange County, where the monthly cost of owning was more than 30% higher than renting.

On the surface, the report's results seem odd, given the country's 30-year fixed-rate mortgage averaged 3.5% in the week that ended Sept 15, and has remained under 4% for much of the past year.

However, housing prices have been rising at a far sharper clip than rents. Average home prices climbed 5.3% in July 2016 from a year earlier and surged 42.6% from the sector's trough in 2011.

A number of factors are driving the spike in home prices: Low mortgage rates, the country's attractive 4.9% unemployment rate, foreign investors snapping up U.S. single-family homes and condos as safe havens for investment, and - most importantly - a surge in "flippers," which are investors who buy homes and sell them within a year for a quick profit.

Inventory also plays a role. Most construction in recent years has been in building multifamily units - condos and rental apartments. There's a ton of supply coming into the apartment world, which is keeping rents low enough that they're not infringing on homeownership costs.

Whereas, housing inventory has declined.

For more information on apartments in Garner, NC, contact Abberly Place.

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Abberly Place Apartment Homes

500 Abberly Crest Boulevard, Garner, NC 27529

Call: 866-526-0879
Email UsAbberlyPlace024@myLTSMail.com
View Map

Opens: Monday-Friday: 9A-6P | Saturday: 10A-5P | Sunday: 1P-5P

$937-$1,361