If you are looking to move to a new house, you might be wondering if it’s better to look at homes for rent in Forth Worth/Dallas or look for a house to buy. There are more homes for rent in Dallas Texas and Forth Worth, than there are homes for sale and the demand for housing in general has skyrocketed. This can make it much harder for new buyers to enter the market. In this week’s article we will look at the impact of these trends on house prices and rental prices and see if it’s better to buy or rent a house.
As we’ve discussed before, the current situation of DFW’s real estate market is unprecedented. House prices are higher than ever and a house can sell within days of listing. According to many experts, this trend is likely to continue through the rest of 2016.
Zillow has already predicted the DFW area to be the 3rd hottest housing market of 2016 in the US, with an estimated 5.6% increase in house prices. This is largely caused by a growth of average income and a low unemployment rate. The booming tech industry in the region promises the amount of jobs to grow hugely in the future.
Because there is such a huge demand for houses in DFW with a lot of investors bidding against each other, it can be much easier to find a good rental. Some people even say that the rise in housing prices is largely caused by price speculation and is temporarily. This makes it safer to rent because if the value of the house goes down again you are protected from the effects.
The extremely high real estate prices has led to significant mortgage costs. By renting you can save up a lot of money. You could invest this money in a variety of ways, enabling you to grow your money without owning a house.
The differences between renting and buying are increasing at a rapid pace in today’s time. House prices have been going up with about 9.5% in DFW while rental prices ‘only’ went up 3.5%. Not only do you have a lot more houses to choose from when renting but you also face a lot less competition.
If you have enough money in the bank to take care of down payments and you’re looking to stay in the area for a long time, buying could be a good choice for you. By choosing a fixed mortgage rate, you know exactly what your interest costs will be for the entire duration.
At the end of the mortgage period you can decide to move somewhere else and rent out the house you’ve now paid off. You might be able to pay for your new place completely with your rental income. This can be a great investment into your retirement.
The time factor also plays an important role in this. The longer you plan to live in a house, the more attractive it will be to buy. Every house has its ‘breakeven point’, which is the amount of time at which buying will be financially better than renting.
Dallas was recently mentioned as having one of the lowest breakeven points in the country with 3.2 years. This makes it interesting to buy a house in the DFW area, even if you’re only planning to live there for a couple of years
Whether it’s better to buy or rent a house depends from person to person. You might value your flexibility highly, making you want to rent. Or you might prefer the freedom to renovate and redecorate your house as you please, making you want to buy.
It would be very dangerous to see the rising real estate prices as a sign to step into the market, speculating on a further increase in prices. Even for experts, it’s very hard to predict the future of real estate so without the assistance of a real estate agent with years of experience, you’re treading on thin ice.
Whatever you do, don’t rush yourself into a deal because it might very well be the most significant decision of your life.
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