Buying is a better option than renting for millennials
Posted on Monday, November 2, 2015 at 10:35:31 AM
Long thought of as a renting generation, it turns out that buying a new home costs millennials 23 percent less than renting nationwide. A recent study conducted by Trulia found that with interest rates for 30-year-fixed-rate mortgages so low - around 3.85 percent, down from 4 percent last year - it is the best time to buy a home since 2012. Trulia assumed that with a 3.85 percent mortgage rate, a 25 percent tax bracket, and certain itemized federal tax deductions, owning was actually cheaper than renting for millennials in 98 of the top 100 markets in the nation.
Of the top 100 metro markets, only San Jose, California has homes that are 2 percent more expensive to buy than rent. In New York, on the other hand, it is 11 percent cheaper to buy. Friendly residential financing options and the first time homebuyer credit have made it easier for millennials to shrug off their renting reputation.
In fact, the Mortgage Bankers Association announced last month its expectation of $905 billion in purchase mortgage originations in 2016. That is an increase of 10 percent from 2015. The MBA went on to predict $978 billion in purchase originations for 2017 as more millennials look to buy their first homes.