No one likes to waste money every month in rent. A recent report shows it might not just be annoying, it could be costing you more money than you think.
Studies show in Kansas it’s cheaper to own than rent
In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The updated numbers actually show that owning can be as much as 36% cheaper than renting nationwide.
A recent study by GoBankingRates looked at the cost of renting vs. owning a home at the state level and concluded that in 36 states it is actually ‘a little’ or ‘a lot’ cheaper to own, represented by the two shades of blue in the map below.
What does this mean for Kansas?
This is great news for Kansans. We are one of eight states where it costs a lot more to rent than to own. The average monthly rent in Kansas is $1,150; the monthly mortgage is $836. For Wichita, the median rent of a one-bedroom apartment is $470. That gives you 595 square feet with $153.75 monthly utilities.
According to gobankingrates.com, however, home sales have been slower in Kansas compared to the rest of the country. Sales in Kansas rose by 1.3 percent in May 2016 compared with the same period last year, but home sales on a national level rose 4.5 percent, according to the Kansas Association of Realtors.
Why’s it cheaper to own?
One of the main reasons that owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that interest rates fell again last week to 3.43%. One year ago at this time, the 30-year fixed-rate mortgage averaged 3.91 percent.
Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.
Buying a home makes sense socially and financially.
“Home” means more than the materials that put it all together. It means living in a …
- Good neighborhood to raise children and to provide them the best education.
- Place that provides your family safety and comfort.
- Structure that provides for your family’s needs.
- Space that you control when to change or renovate.
- Place that you can pass along to future generations.
If you are one of the many renters who would like to evaluate your ability to buy this year, let’s get together and find you your dream home.