Buying Versus Renting Archives - Jagoe Homes

Buying vs. Renting in 2020

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Buying vs. Renting in 2020

Buying your new Jagoe Home is a wonderful experience and an important milestone in your life! Especially if you are going from renting to homeownership, this time can prove to be a major transition.

Homeownership has always been considered a benchmark of the American dream. However, many families have chosen to find domestic bliss without paying a mortgage in recent years. What they’re missing are the big benefits of homeownership that just can’t be replaced by renting.

BIG Benefits of Homeownership:
  1. Owning a home is CHEAPER than renting. Although purchasing a home is more expensive at the outset, it can be cheaper than renting in the long term if you play your cards right. According to real estate website Trulia, homeownership is 38% cheaper on average than renting nationally, which is a 3% decrease from 2013. Their calculations are based on a traditional 20% down, 30-year fixed-rate mortgage. They compared the total costs of homeownership, which includes maintenance, taxes, and insurance, to the total costs of renting for the same period. They attribute the drastic difference in costs to the rising costs of rent and the low fixed-rate mortgage rate, which currently sits at 4.3%. That’s not to say that buying a home isn’t expensive – you’d still have to come up with the 20% down payment or pay mortgage insurance that would eat into your overall savings. Read More on Down Payment Assistance! The fact is by paying more up front on your own home, you can save money in the long run. And since all Jagoe Homes are built Energy Smartyou end up saving thousands in energy costs!
  2. It forces you to SAVE and build equity! One of the most significant benefits of homeownership is building equity, which is your share of the value of your home. Read More on First-Time Home Buyer Help! In more technical terms, it’s the difference between the market value of your home and the amount that you still owe. If you buy a home now, imagine how much equity you could have by retirement! Instead of your money disappearing into your landlord’s pocket each month, you’ll be paying into something that can become more valuable over time.
  3. Mortgage costs stay the SAME as Rents RISE. If you get a fixed-rate mortgage on a home purchase, your mortgage payment can never change. Unless a renter is in a rent-controlled building or neighborhood, their rent is at risk of rising every year. Since the mortgage payment is the bulk of the owner’s housing payment, this creates a lot of budget stability. As for the other costs, both owners and renters have insurance, although insurance isn’t required for renters like it is for owners. That fee can change very slightly year over year. And while owners have property taxes that renters don’t, and property taxes can rise as the home appreciates, this fee is tax deductible. Speak with our preferred lender, FBC Mortgage, for competitive rates and more financing options!
  4. Your home can appreciate in value over time. Let’s be frank — property doesn’t always appreciate in value, which many learned the hard way in 2008. However, many experts believe that the worst is behind us. If you do your research and purchase a home with both eyes wide open, your home’s value may increase each year that you own it. Zillow economist Stan Humphries estimates that the average house appreciates in value around 3.5% each year, but some areas experience steeper increases. For more information, visit our Home Loan Learning Center.
  5. It is more stable and give you stronger social ties to your community. Buying a home is a big step in settling down and putting down roots in a community. Researchers find that not only do homeowners gain a sense of stability when they settle into their first home, but they also contribute to neighborhood stability. A study compiled by researchers with the National Association of Realtors shows that homeowners move less frequently than renters and stay in their homes for longer periods of time. Between 2010 and 2011, only 4.7% of homeowners relocated, but 26% of renters ended up moving, with many citing housing-related reasons.
  6. You can build your dream home. As a renter, you’re basically living in somebody else’s home and are subject to their rules. When you build your new Jagoe home, you have absolute control over what goes into your home. In the survey conducted by Freddie Mac, 89% of renters said that being able to redecorate their living space would be a perk of owning their own home. Luckily for new home buyers, you get to style your home exactly how you want it. From the floorplan, to the countertops, to the size of kitchen sink – all aspects are uniquely built to your families’ needs. If you fantasize about customizing your dream house, purchasing or building your own home is the only way to make that dream happen.

Design Your New Jagoe Home Online!



Why build a new home?
  1. A previously owned home can be a great value, but it can also come with hidden defects that a standard home inspection won’t reveal. What may seem like a great value, may not end up paying off. As well, most older homes don’t meet today’s Energy standards, which is money out of your pocket every heating and cooling season.
  2. All Jagoe Homes are built Energy Smart! A new Jagoe Home is built to the highest standards in the industry and with painstaking attention to detail, backed by our full-time service and warranty department. And your Jagoe home will be incredibly energy-efficient; all new Jagoe homes are inspected and tested by a certified RESNET rater, which scores home energy performance.
  3. All Jagoe Homes are backed by a 2-10 Home Buyers WarrantyThis covers 10 full years of structural defect coverage for load-bearing components, 2 full years of systems surety coverage against defects in wiring, piping, and ductwork in electrical, plumbing, heating, cooling, ventilating, and mechanical systems, and 1 full year of surety coverage against defects in workmanship and materials.

Speak with our preferred lender, FBC Mortgage, and build your new Jagoe Home TODAY!


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Buying vs Renting continued

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Buying Versus Renting, Easier Choice in the Midwest!

By Jeff Kolko, Chief Economist on October 15, 2014

Buying vs Renting? Buying is 38% cheaper than renting nationwide, and buying is cheaper than renting in all of the 100 largest metros. In fact, buying is at least 20% cheaper than renting under our baseline assumptions in all of the 100 largest U.S. metros except Honolulu.

The gap in the costs between renting and buying differs across metros largely because each market has its own typical prices and rents. In addition, property taxes and home-price appreciation differ locally. Taking all these factors into account, buying ranges from 17% cheaper than renting in Honolulu to 63% cheaper than renting in Detroit.

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Buying vs Renting

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Rent vs BuyBy Jeff Kolko, Chief Economist on October 15, 2014

Buying Cheaper Than Renting

The question of buying vs renting a home answered in detail. Nationally, buying is 38% cheaper than renting with a traditional 20% down, 30-year mortgage. Buying is an even better deal with a 15-year mortgage, but not as favorable with less money down.

Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas. In fact, buying is 38% cheaper than renting now, compared with 35% cheaper than renting one year ago. Why is the gap widening? Two reasons. First, in the past year, the 30-year fixed-rate mortgage rate has fallen from 4.8% to 4.3%. Second, rents have risen faster than prices, excluding foreclosures. Together, these trends have made buying even more affordable versus renting than it was last year.

Our Rent Versus Buy model assumes a traditional 30-year fixed rate mortgage with a 20% down payment. But there may be good reasons for financing a home purchase other ways. Consumers tell us that the main obstacle to homeownership is the down payment. For those would-be homeowners – especially first-timers without savings or equity from another home – a low-down-payment mortgage might be the only option. For others, paying all cash might give them the deciding advantage over other bidders on a house. This edition of Trulia’s Rent Versus Buy report focuses on how different types of mortgages affect the math of buying versus renting.

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