In recent years, the United States has been dealing with a crisis in the housing market. As stated by Fortune magazine we have seen that many have lost jobs and homes and have had to turn to renting more often as an alternative. While this was happening, many of these houses that had been lost or abandoned were piling up with their value dropping. Now with the economy showing signs of a rebound and with jobs coming back, there has never been a BETTER time to buy a house!
Two major factors are contributing to this dramatic recovery in residential real estate. The first is the historic drop in new construction development due to our credit crisis and low demand. The second being the steep decline in prices, such as a 30% nationwide drop since 2006, and as much as a 55% drop in the hardest hit areas. These two factors equate to a PRIME market for home buyers, allowing them to get in on great deals now, while gaining all of the monetary benefits later.
Yippee!! We have FINALLY gotten back to the point where owning a home is cheaper than renting one! Studies have shown that homeowners now pay just 9.8% of their income in after-tax mortgage, property tax, and insurance compared to 17.2% in 2007. This means that if you are renting a home right now, than that same home can be yours with a significantly lower mortgage payment compared to your current rent price.
St. Louis is the 8th ranked city in the renting vs. owning category in the U.S., as reported by Fortune magazine. With home ownership being 23% cheaper than renting, investing in a home soon would be wise for current renters and investors alike. Median home prices in St. Louis have also dropped by almost 12% since 2006. This could give a first time home buyer a great return on investment in the coming years if they decide to act now. For sellers this may sound like bad news, however it is not! Although they may lose some equity on the sale of their home, no doubt, I am seeing some or most actually reaping the benefits by taking advantage of the great deals available in the housing market now.