Should You Rent a Home or Own a Home?

Buying in Southeast Michigan? Perform a full home search

Selling in Southeast Michigan? Get a free Home Price Evaluation

Renting might work better for some people but from a financial standpoint, it’s definitely better to own than to rent.

According to the National Association of Realtors, a homeowner’s net worth is 45 times greater than a renter’s.

Another reason to consider buying instead of renting is that home values are on the rise. According to CoreLogic, home prices are up 7.2% over the last year here in Michigan. Going forward, home prices are predicted to increase by 6.4% over the next year. The national average is 5.2%, so Michigan is outperforming the national numbers.

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Home prices will only continue to go up, increasing homeowners’ net worth.

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According to ATTOM Data Solutions, homeowners who sold in the second quarter realized an average price gain of $51,000 since buying their home. That is the highest average price gain for home sellers since the second quarter of 2007, when it was $57,000.

In other words, homeowners in the second quarter of 2017 got an average return of 26% on the previous purchase price of the home. That is the highest average return on investment for home sellers since the third quarter of 2007, when it was 27%.

ATTOM’s report also shows that homeowners who sold in the second quarter had owned the home for an average of 8.05 years.

So, as a homeowner, your net worth is higher and, when you move, you have the opportunity to get a good return on your investment. You can’t get that when you rent a home.

If you have any other questions about owning versus renting or if you’re interested in making a move, just give me a call or send me an email. I would be happy to help you!

What’s Driving Home Prices in Southeastern Michigan?

Low inventory and high demand have led to a 7.7% appreciation in home values in our region.

Buying in Southeast Michigan? Perform a full home search

Selling in Southeast Michigan? Get a free Home Price Evaluation

What’s happening with home prices right now in Southeastern Michigan? Let’s look at some national statistics and see how home prices are changing.  

First, our national average for days on market is 28 days. I’ve never seen a number that low in my 24-year career, and we’re certainly seeing a trickle-down effect in our market—some of our listings are selling in less than a week or even a day or two.

According to the latest report from Freddie Mac, the number of homes sales increased from 632,000 in June 2016 to 656,000 this past June. In our Midwestern region, the number of pending home sales decreased year over year by 3.4%. The main reason for this is the low inventory levels we have.

Our low level of inventory has lead to an appreciation in home values.

Low inventory leads to an appreciation in home values, and many listings are getting multiple offers because there are more buyers out looking for homes than there are homes available. Another factor driving appreciation is the fact that distressed properties have dwindled down to 4% of the market, which is great. Between 2008 and 2012, 35% to 40% of the market was either a short sale or foreclosure, but 4% is a much healthier number.  

In the Midwest, all of these factors have led to a 7.7% appreciation in home values.

If you have any questions about these figures and what they mean for our market or you’re interested in having an equity evaluation done on your home, feel free to give us a call or shoot us an email. We’d be happy to help.