Although the gap between renting and buying is narrowing across the U.S., Vero Beach home buying is still 38% cheaper than renting according to Trulia's Winter 2014 Rent vs Buy Report.
Rising mortgage rates and Vero Beach home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing. Now, at a 30-year fixed rate of 4.5%, Vero Beach home buying is 38% cheaper than renting versus being 44% cheaper one year ago.
Vero Beach Home Buying Beats Renting Until Rates Hit 10.6%
Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting. Also, in some markets, rents have risen sharply; rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison.
Will renting become cheaper than buying soon? Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.
Vero Beach home buying becomes more expensive than renting if mortgage rates rise to 10.6%, and rates haven't been that high since 1989.
Of course, the cost of Vero Beach home buying versus renting depends on how much home prices rise (or fall) after you buy. Estimates assume conservative Vero Beach home price appreciation, but – as we all know after the last decade – Vero Beach home prices can unexpectedly rocket or plummet.
For more Vero Beach home buying tips, visit our Vero Beach Home Buying Tips link under our Vero Beach Real Estate Categories to the right.