In the American mind, renting has long symbolized striving rather than achieving. But as we climb our way out of the Great Recession, it seems something has changed. Americans are getting over the idea of owning the American dream; increasingly, they're OK with renting it.
Home ownership is on the decline, and renting is on the rise. But the trend isn't limited to the housing market. Across the board, Americans are increasingly acclimating to the idea of giving up the stability of being an owner for the flexibility of being a renter. This may sound like a decline in living standards. But the new realities of our increasingly mobile economy make it more likely that this transition from an Ownership Society to a Rentership Society.
The unsentimental fact about the American dream is that Americans never really owned it in the first place. For the past three decades, especially, consumers haven't so much bought their quality of life as they've borrowed it from banks and credit card companies.
Now consumers are following the example of corporations, becoming more efficient. And it starts at home.
Housing is the biggest single component of consumption in the U.S. economy and the source of much of our present misery. The typical consumer spends about 32% of his or her budget on shelter. In the last decade, that generally meant borrowing a lot of money to take "ownership" of a home.
During the boom, the homeownership rate grew steadily, peaking at a record 69% in 2006.
Ownership-boosters failed to note that homes purchased in 2005 and 2006 with no-money-down, interest-only mortgages weren't really bought. They were simply rented until the "owner" flipped them or walked away from the mortgage.
In the post-bust climate, renting has emerged as a much more economically efficient way to pay for housing. A one-year lease represents a far less onerous financial obligation than a 30-year mortgage. It's difficult to get into too much financial trouble as a renter. The homeownership rate has fallen from its peak in 2006 to 65.4% today.
For an increasing number of Americans it makes more sense to rent. According to Moody's, by late 2011 it was cheaper to rent than to own in 72% of American metropolitan areas, (such as Roanoke) up from 54% a decade ago. And the more people who do it, the more socially acceptable and desirable it becomes. The decline in the ownership rate means that about three million more households rent today than did at the height of the bubble.
It's tempting to view the rise of renting as an economic step backward. But many would argue the rise of renting is a sign of a system adapting to new realities.
The U.S. economy needs the dynamism that renting enables as much as, or more than, it needs the stability that ownership engenders.
And the rising popularity of renting is hardly contained to the housing market.
Finally, perhaps, Americans are absorbing a piece of wisdom from Thoreau: "And when the farmer has got his house, he may not be the richer but the poorer for it, and it be the house that has got him."
Low mortgage rates and more affordable home prices in the Roanoke Valley are creating an interest in homeownership by those who live in apartments. However, potential buyers who are unprepared for the true cost of owning a home may be shocked by the bite home ownership can take out of their wallet in addition to their mortgage payments.
Inspection and Appraisal Fees
Before you purchase a home you need to pay for a home inspection, and an appraisal, possible even inspections for pests or radon. The costs of these inspections are borne by buyers and are a necessary protection to avoid buying a flawed property or paying too much.
Closing Costs
Buyers need to be prepared with the cash for anywhere from 2% to 4% of the mortgage balance depending on your area.
Taxes
As a homeowner, you'll need to pay property taxes, which are generally part of the escrow you pay into each month. Remember, even if you have a fixed-rate home loan, your property taxes could go up and increase your monthly housing costs.
Insurance
Your lender will require home insurance, the cost of which depends on factors including the construction materials of your home and the location. Even if you have renter's insurance, you'll find that home insurance costs more because you are paying for the ability to rebuild your home in addition to replacing your personal possessions. Insurance costs will rise over time, and you will need supplemental insurance if you live in a flood zone.
HOA and Condo Fees
If you buy a home within a homeowners' association or a condominium association, you'll be required to pay a monthly or quarterly fee. These fees can rise, or your association may need to charge a special assessment for projects such as repaving the parking lot or repairing a roof.
Utility Bills
Depending on where you live, your costs for electricity, gas and water could be higher when you move into your own home than when you live in an apartment in Roanoke, VA. You may also need to pay for garbage collection along with your Internet, cable and phone bill.
Furniture
While this is essentially a discretionary expense, most people who move from an apartment to a larger home need to buy at least some new furniture.
Lawn Care
Whether you handle your yard work yourself or hire a professional, you will have to pay something to keep your landscaping in check. Lawn equipment can be costly and you may need a leaf blower and other yard tools, too.
Maintenance
Home maintenance costs time and money. While you may be able to change your furnace filters, clean your gutters and keep your appliances running smoothly yourself, you may also need to hire a contractor to clean and inspect your chimney and to keep your heating and air conditioning system in top shape.
Repairs
While maintenance tasks can be predictable, the most costly part of home ownership typically comes with unexpected repairs such as replacing or repairing the roof, removing a tree, or paying for mold mitigation in a damp basement. The list of possibilities is endless, so homeowners should set aside savings for an emergency. Experts suggest budgeting for 1% or 2% of your mortgage balance as a yearly maintenance and repair fund.
The Bottom Line
Buying a home costs more than you think. If you don’t expect to stay in your home for at least seven to 10 years, contact Pebble Creek Apartment Homes.
As home values fell again in 2011, more and more people are looking to renting as an affordable, flexible option. In response to this news, Apartments.com conducted a national survey to more than 3,000 of its January website visitors to find out the reasons they are moving and why they are renting versus owning.
Supporting a growing trend, 33.6% of respondents looking for an apartment this year said they are previous homeowners (up from 20.5 percent in 2011). Respondents who said they are homeowners looking to rent, 26.3% are doing so because they believe renting is a more affordable option and 21.2% prefer the flexibility renting offers in choosing where to live. Apartments.com provides the five most popular responses why their website visitors are choosing to rent versus own in 2012:
Renting is a more affordable option: (26.3%)
Flexibility to live where I choose: (21.2%)
To relocate for employment: (20.5%)
Cannot afford to keep up with homeownership expenses: (10.5%)
Lost home due to foreclosure and change in marital status: (less than 4% each)
"It's more important than ever for apartment seekers to be informed and savvy shoppers by utilizing all the online resources available to search for apartments within their budget," says Chris Brown, VP of product management, Apartments.com.
More than 35% of respondents said they are moving out on their own, which may be a sign of an improving economy and job market, especially in the rental demographic.
The number one reason for moving in 2012 is for relocation for a job opportunity. However, the desire to have more space, to save money and to live in a more desirable neighborhood also topped the list.
House prices are low and mortgage rates are too, many say it is time to buy a home. But in an upside down real estate market, is it really more cost-effective to own as opposed to renting? Interest rates are lower, house prices are down, but it's also harder to get financed.
Many renters today have gotten out of a mortgage. Others are renting so they are not tied down to such a large payment every month.
Whether you should rent or buy depends on many factors, like how long you plan to stay in your home. Some experts will tell you buying is better than renting only if you plan to be in your house more than five years.
If you don't need the tax help, which is minimal, you may want to rent. Most of the time, and always at Pebble Creek, apartments in Roanoke, VA, the landlord will fix a kitchen sink which saves the renter out of pocket money.
Here's one pro and con breakdown:
Pros to Buying a House:
Emotional satisfaction of owning your own home.
It builds equity, (but it takes awhile).
You can get a tax break if you deduct your mortgage interest and your property taxes.
Cons to Buying a House:
Homeowners have to pay property taxes
Homeowners have to pay for maintenance and upkeep.
There's less flexibility if you decide to move.
Down payments are often 20% of the purchase price (if you want to avoid mortgage insurance). That's money that could have been invested elsewhere.
Lastly, most experts say the value of properties won't go up soon. When they do, since selling your house with a realtor normally comes with a 6% commission, values must go up by at least 6% JUST to break even, that does not take into account closing costs.
Buying at today's prices doesn't necessarily mean your house will be worth more in a couple of years. Whether it's worth the risk to buy is something each person needs to figure out for their unique situation.
The common opinion is that making a rent payment instead of a mortgage or purchasing is like “throwing the money in the wastebasket.” At some point in time before the recession, homes were incorrectly considered an investment that would “always” go up rather than one that “may” go up.
When you consider all the pros and cons, buying may not be the best choice in all situations.
Avoid big money commitments: Usually, one can rent anapartment in Roanoke, VAfor the same or less than the cost of buying and they don’t have to come up with large fees like closing costs or taxes. Also, if a mortgage is taken out, the first several years of payment are dedicated mostly to the interest, not the principal.
Many apartment communities cover the costs of maintenance, landscaping and general repairs that a buyer would be responsible for themselves. A renter’s biggest expenditures are often moving and furnishings.
Flexibility: Since renting requires no substantial long-term investment, the renter has choices more often about their living situation. Moving from a bought home involves planning and costs such as commissions to real estate brokers. Also, if a home buyer wanted to sell, they could be at the mercy of the markets or not be able to sell their home at a profit.
If house values continue to decline, the worst scenario for a renter is only paying until their lease expires. People who rent can’t place a value on having that freedom.
Investment Considerations: Large down payments or home purchases can make it difficult for home buyers to maintain savings and investments specified for retirement and related activities.
In some cases, the money saved by not buying could outweigh the money earned on a purchased home, depending on the investment and property appreciation. For a home buyer, the risk is higher if an unexpected sickness or injury occurs causing financial strain.
The rent vs. buy decision is more than comparing lease and mortgage payments. The reality is there are pluses and minuses to each option.
The housing market is stagnating right now and real estate brokers would have potential buyers believe that there is no better time than the present to buy a home. It is true, prices are down and mortgage rates are at all-time lows.
Unfortunately for the real estate brokers, many clients are not persuaded by that logic. Instead, in increasing numbers, they are choosing to rent instead of buy — unconvinced that the housing market has yet hit bottom. Would be buyers also understand that unless you plan to stay in your home for more than 10 years, buying a home may not be the right investment for everyone.
With apartments in Roanoke, VA located in a quiet section of Roanoke's Southwest County, offering apartment amenities that can’t be found in homes, renting is a great option for many. There is also a broad mix of tenants at Pebble Creek Apartment: young single residents and families and empty-nesters that no longer have homeownership on their wish list.
One of the most popular home ownership myths in Roanoke, VA is that owning a house is a huge tax break as compared to renting. I don’t know how many times people have personally told me that they want to buy a home because they NEED a tax deduction! I just shake my head in disbelief because I have done the math.
If your mortgage interest and other qualifying expenses such as charity contributions aren’t more than the standard deduction, ($11,600 for joint filers in 2011), there is no tax advantage to owning a home as opposed to renting an apartment in Roanoke, VA. Assume that you buy a $200,000 house with a 5% downpayment at a 6% interest rate. Your mortgage interest for the year would be $11,336. The Standard Deduction for joint filers is $11,600.
In this example, there is NO TAX BENEFIT. Even when there is a tax benefit, you most likely paid much more money to maintain the house than you are saving in taxes. If your mortgage interest is more than the standard deduction and you choose to itemize, there is little to no advantage.
For example, assume that your mortgage interest in 2011 is $15,000. You would get to deduct an additional $3400 if you itemize BUT you spent $15,000 in mortgage interest to save $850 on your taxes (assuming 25% tax bracket).
Don’t forget that you would also have all of the other expenses of home ownership that you would not have incurred when renting an apartment in Roanoke, VA in an HHHunt community.
Many people can tell you a list of reasons why you should buy a home. But that really depends on who and where you are in your life as well as your career. Despite the prevailing idea that everybody should settle down and buy their own home, research shows there are actually times and circumstances when renting an apartment in Roanoke, VA might be a better idea.
Will you put in the time?
In any investment, there's no such thing as a sure thing. What usually makes real estate a better risk than most is time. The longer you commit to a property, the better your chances of seeing its value appreciate.
If it is likely in any way that you will move, change jobs or stay in the house for a short period of time, buying may not be a good idea. Letting go of a property before it has appreciated enough to cover the costs and commissions is not pleasant and if you bought with less than a 10% down payment, it could be brutal. Commission and closing costs will likely wipe out appreciation gains, if there were any. If the purchase was made with an even smaller down payment, chances are you'll come out at a substantial loss.
Will you like the neighborhood?
If you are new to a state, city or town such as Roanoke, research suggests you take ample time to acclimatize before investing money in a house and its neighborhood. If you are relocating to a place you hardly know, spend a year in an apartment in Roanoke until you're certain where and how you want to live.
Will you be happy giving up the freedom?
Initially at least, rentingis less financial pressure than buying. Paying a first and last deposit doesn't compare to the big chunk of change required for a down payment on a house. And even if you have enough savings, you could invest it otherwise and hope for significant capital gains. With current market volatility that may not seem prudent, but just imagine if you'd invested a typical down payment amount in the stock market ten years ago.
Renting gives you the freedom of time as well, with no yard or home maintenance projects. Renting is also lower risk because natural and other disasters the problems of the landlords.
Even though rents tend to increase by 3 percent a year, unexpected maintenance costs or sudden property tax hikes don't concern you either.
Relocating to Roanoke, VA? You should look at Pebble Creek apartments, contact us.
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In the American mind, renting has long symbolized striving rather than achieving. But as we climb our way out of the Great Recession, it seems something has changed. Americans are getting over the idea of owning the American dream; increasingly, they're OK with renting it. 
Low mortgage rates and more affordable home prices in the 
As home values fell again in 2011, more and more people are looking to renting as an affordable, flexible option. In response to this news, Apartments.com conducted a national survey to more than 3,000 of its January website visitors to find out the reasons they are moving and why they are 
The housing market is stagnating right now and real estate brokers would have potential buyers believe that there is no better time than the present to buy a home. It is true, prices are down and mortgage rates are at all-time lows.
Will you put in the time?
