SAN JOSE, Calif., May 28, 2015 /PRNewswire/ -- With interest
rates and home prices expected to climb in the next year, the
financial penalties of delaying or forgoing a home purchase in
today's market have become very steep, according to the inaugural
Opportunity Cost Report released today by realtor.com®, a
leading provider of online real estate services operated by News
Corp [Nasdaq: NWS, NWSA] subsidiary Move, Inc. The proprietary
report examines a wide range of factors, including the long-term
financial impact of owning versus renting a home, the likely
monetary gain renters forego in waiting to buy and the financial
benefits of homeownership by market.
National Outlook
30-Year Total
Financial Benefit of Owning
|
Penalty of Waiting
1 Year to Buy
|
Penalty of Waiting
3 Years to Buy
|
$217,726
|
-$18,672
|
-$54,879
|
"Current market conditions give buyers the opportunity to build
substantial wealth in the long-term, compared with renters and
later buyers, in advance of the projected increase in
mortgage rates and continuing price appreciation," said
Jonathan Smoke, chief economist for
realtor.com®. "The problem is inventory is low, which has
many would-be home buyers – especially first timers – standing on
the sidelines and missing out on potentially material financial
gains."
Nationally, the estimated wealth an average buyer would
accumulate over a 30-year period based on today's dollars totals
$217,726. Although some markets
are more buyer-friendly than others, national data shows homeowners
see significant financial benefits as compared to lifetime renters.
In 88 percent of MSAs, buying a home produces a financial benefit
of at least $100,000 over 30
years.
Market Outlook: 10 Markets with Long-Term
Gains Exceeding $500,000
Market
|
30-Year Total
Financial Benefit of Owning
|
Penalty of Waiting
1 Year to Buy
|
Penalty of Waiting
3 Years to Buy
|
Santa
Cruz-Watsonville, CA
|
$1,006,413
|
-$65,780
|
-$203,524
|
Santa Rosa,
CA
|
$883,068
|
-$44,402
|
-$138,553
|
San
Jose-Sunnyvale-Santa Clara, CA
|
$782,144
|
-$61,805
|
-$191,053
|
Urban Honolulu,
HI
|
$714,748
|
-$46,464
|
-$136,943
|
Napa, CA
|
$712,192
|
-$40,182
|
-$126,036
|
Denver-Aurora-Lakewood, CO
|
$696,131
|
-$26,637
|
-$88,297
|
Salinas,
CA
|
$553,158
|
-$39,145
|
-$119,413
|
San Diego-Carlsbad,
CA
|
$518,382
|
-$35,317
|
-$107,842
|
San Luis Obispo-Paso
Robles-Arroyo Grande, CA
|
$510,719
|
-$44,343
|
-$133,835
|
Fairbanks,
AK
|
$507,368
|
-$26,883
|
-$78,158
|
Ten markets offer an especially considerable upside to owning,
with estimated 30-year financial gains above $500,000, and opportunity costs of waiting three
years as high as $200,000.
These MSAs, in California
and other Western states, are relatively expensive markets with
strong housing demand and limited supply. The potential long-term
wealth in these areas is the greatest nationwide, and likewise, the
long-term financial penalty for delaying ownership is substantial,
due to price appreciation, escalating rents, and higher mortgage
rates on the horizon. (An analysis of the Top 100 MSAs
follows.)
"This analysis looks solely at the financial reasons to buy a
home, based on assumptions about rising mortgage rates and changes
in home values," Smoke said. "It's important to remember that a
home purchase decision is deeply personal. Potential buyers need to
consider factors such as upcoming life events, job security and
potential relocation, in addition to financial benefits, because
they too can have a significant impact on ownership."
About the
realtor.com® Opportunity
Cost Report
Realtor.com® analyzed the 382 largest markets in the U.S. using
data on current median existing home prices, rents, local mortgage
rates and estimates of property tax and insurance rates, and
factored in maintenance costs, costs of selling, and forecasts for
mortgage rates, home prices and rents over a 30-year time
horizon.
Supporting Resources
- Read more about realtor.com®
- Follow @realtordotcom on Twitter
- Like realtor.com® on Facebook
- Download realtor.com® mobile apps
About Move, Inc. and realtor.com®
Move, Inc., a subsidiary of News Corp, is a leading provider of
online real estate services. Move operates the realtor.com® website
and mobile experiences, which connect people to the most important
and accurate information they need to find their perfect home and
to the REALTORS® whose expertise guides consumers through buying
and selling. As the official website of the National Association of
REALTORS®, realtor.com® empowers consumers to make smart home
buying, selling and renting decisions by leveraging its direct,
real-time connections with more than 800 multiple listing services
(MLS) via all types of computers, tablets and smartphones. In
addition to the industry's most comprehensive and accurate
information, Move's network of websites provides consumers a wealth
of innovative tools, including Doorsteps®, Moving.com™,
SeniorHousingNetSM and others. Move supports real
estate agents and brokerages by providing many services to grow
their businesses, including ListHub™, the nation's leading listing
syndicator and centralized intelligence platform for the real
estate industry; TigerLead®; Top Producer® Systems; and
FiveStreetSM; as well as many free services. Move is
based in the heart of Silicon Valley – in San Jose, Calif.
Forward-Looking Statements
This document contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's views and
assumptions regarding future events and business performance as of
the time the statements are made. Actual results may differ
materially from these expectations due to changes in global
economic, business, competitive market and regulatory and other
factors. More detailed information about these and other factors
that could affect future results is contained in News Corp's
filings with the Securities and Exchange Commission. The
"forward-looking statements" included in this document are made
only as of the date of this document and we do not have any
obligation to publicly update any "forward-looking statements" to
reflect subsequent events or circumstances, except as required by
law.
Media Contact: Sara
Johnson sara.johnson@move.com 408-558-7211
To view the realtor.com® Opportunity Cost Report market
list, visit:
http://origin-qps.onstreammedia.com/origin/multivu_archive/ENR/0-Financial-Benefit-of-Owning-Market-List.pdf
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/new-report-finds-waiting-to-buy-a-home-could-cost-thousands-300089980.html
SOURCE realtor.com