Homeownership in the Valley. Buy now or buy later?
Buying a home in Phoenix is more affordable than renting one according to a recent report by ATTOM Data Solutions. In fact, that goes for 66 percent of the housing markets across the country. But it may not stay like this for long.
"While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017," said Daren Blomquist, senior vice president with ATTOM Data Solutions. "In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year. Additionally, renting may end up being the lesser of two housing affordability evils in a growing number of high-priced markets."
Median home prices in 2016 rose faster than average wages in Maricopa County according to ATTOM. ATTOM's latest report showed the 2016 median home price was $225,000, while the 2017 3-bedroom fair market rent averages $1,467. Phoenix homeowners area saw a noticeable jump in appreciation over the past year, around 9 percent according to Zillow. Maricopa County as a whole saw a more than 6 percent climb.
"A big reason for that is we depreciated more than the rest of the country," said Brandon Hendrick, mortgage lender at Valley-based V.I.P Mortgage.
Hendrick said buyers who are on the fence about taking on a mortgage should remember there are other reasons to buy a home other than the chance it will appreciate.
"There's being able to plant roots and the pride of homeownership," Hendrick said. "When it's time to make a change when you're renting you can't paint, you don't own it. (When you buy) you can renovate, and increase value of the home overall. Plus you're able to write off interest and real estate taxes."
Think you don't have the money to buy? Hendrick said there are several programs requiring 5 percent or less down, and veteran's loans which require no down payment. Read more here.