Rents Skyrocketing; Time to Buy a Home in Portland

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Wondering whether it makes more sense financially to rent or buy a home in Portland?

The answer depends on a lot of things — how long you’d stay in in the home you bought, what the value is of the home you’d buy, and of course what you’re currently paying for rent.

That number has been going up and up for many Portlanders. In fact, they’re getting downright unaffordable. Real estate website Zillow reports that while nationwide, rents grew 3.3% over the past year, they grew a whopping 7.2% for Portland. That’s the fifth highest gain in rent out of all US Metro areas measured by Zillow!

The good news is that it’s still very affordable to buy a home in Portland, comparatively speaking. Yes, home values are climbing, but mortgage rates are still at historic lows. New Federal Housing Administration loans are targeted at first-time homebuyers with extra-low down payments. Lower mortgage rates and down payments mean that first-time home buyers can get into the housing market now, pay off their mortgage slowly while home values continue to rise, and have a much better chance of earning some money off their home when they sell it down the road.

The “rent vs buy” question is starting to look skewed toward “buy” in Portland, but do your research before you decide. A new and very useful new tool is Trulia’s Rent vs Buy calculator. Once you know a few details like the rent you pay now, the value of the home you would buy, and how long you would live there, you can plug them into the calculator. It will give you an instant readout of what your monthly mortgage payment would be (an approximate figure, of course, but still helpful), compared to your rent.

There are still other factors to consider when deciding whether it’s time to stop renting. If you rent near your place of work but can’t afford to or don’t want to buy a home there, you’ll have to factor in increased commuting costs. Keep in mind that you also will want to set aside some funds for inevitable home repairs. Owning a home gives you less freedom to pick up and move — but then again, you’ll never have to move unless you decide to!

With rents on the rise, don’t pay more for housing than you need to. Call your local Portland real estate agent today to find a home that will work for you — as a shelter, and as an investment toward your future. Let me know if I can help!

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