Tuesday, September 4, 2012

Owning a Home is Gaining in Appeal as Rents Head Higher

The Wall Street Journal recently had an article indicating that rent increases are making home ownership more appealing day by day.  In 2011 alone, the number of investor owned homes increased by 65 percent during 2011 and represented 27 percent of all sales.  This number is certanily higher in investor markets like Phoenix.  With returns on more traditional investments very low compared to risks associated with them, more and more people are turning to the rental market as a way to develope a nest egg.  With returns of 6-12 percent and the good possibility of future price increases, it makes a lot of sense to this. 

However, if one compares rents to house payments in many markets, ownership makes more sense as affordability reaches heights not seen in decades.  Apparently, many are making this assessment and are pouring back into the market helping tamp down inventory to even lower levels.

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