Millennials Should Buy, Not Rent
Nov 19, 2015 November 19, 2015
The generation that's faced so much economic hardship continues to grow up and it seems there's no end to their challenge. Particularly evident in South Florida, is the issue of housing. Millennials living in South Florida want to buy homes but encounter a shortage of affordable homes in the current market.
And the decision to buy instead rent is backed by research. According to a study compiled by Trulia in Miami-Dade County, buying a home is 43% cheaper than renting one. The trend continues in Broward, where purchasing a home is 44% cheaper. In the same report, they discovered that only three out of the top 100 biggest cities in the U.S. get a greater benefit from renting than buying. Those cities were Houston, TX, Baton Rouge, LA, and Syracuse, NY.
“The fact that buying is a better deal is particularly surprising because home prices in South Florida have been on a tear over the last three or four years,” Ralph McLaughlin, Trulia's chief economist said, “But rents are going up quickly too.”
Renters spend more per month in rent than a monthly mortgage payment would cost after the down payment. The median price of single family homes and condos in Miami-Dade county was a little over $240,000 in September. The median rental price was almost $2,000 per month. Although many experts acknowledge the difficulty of the down payment for young buyers and attribute the lack of home purchases to the lack of ability to save enough for a down payment. We see there are several factors at play. Keep and eye on how this phenomenon plays out. It's a good indicator of the overall longterm financial wellbeing of this generation.