Buy or Rent? The financial gap between these options is growing
SALT LAKE CITY, Utah (KUTV) –
Buy or Rent?
That is the age-old question of housing. But new data shows how much more expensive either option is compared to the others along the Wasatch front.
According to John Burns Real Estate Consulting, owning a single-family home in Salt Lake City costs 81 percent more each month – with mortgage payments and maintenance costs – than renting a typical apartment. That’s a monthly difference of about $ 1,200, according to the data.
In the Provo-Orem area, the difference is even greater, as it costs $ 1,316 more each month to own a single family home than to rent a typical apartment. (An entry-level house is valued at around 80 percent of the median price of the market.)
The financial gap between property and rent in these areas is wider than ever when you look at data over the past two decades.
“I’m not surprised,” said Paul Smith, executive director of the Utah Apartment Association. “Nobody likes it when rents go up, but rents go up much less than home prices.”
In fact, according to data from John Burns, the cost of housing in Salt Lake is up 18 percent year-over-year, while the monthly cost of owning a home is up 28 percent.
In Provo-Orem, home rents rose nearly 16 percent year-over-year, but the cost of ownership rose more than 30 percent.
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“Living in an apartment is maintenance free,” said Smith. “Somebody is mowing the lawn. Someone else will take care of the structure for you. So renting has many advantages. “
But many people want to realize their dream of owning a home. The newlyweds Maci and Gavin Davey are happy to have found a house in Layton. In the hip Utah housing market, the Daveys lost several offers before finally accepting one.
Despite higher home costs, the Daveys told KUTV 2News that they wanted to buy.
“Better to get your foot in the door as soon as possible,” said Maci Davey.
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“I think in the long run it has to be viewed as an investment,” added Gavin Davey, “something that you can end up making money with.”
Homeowners in Utah have seen tremendous stock gains over the past few years. According to UtahRealEstate.com, the statewide median price for all apartment types was $ 467,500 in November, up 24 percent year over year.
The median price was $ 515,000 for a single family home in the state, nearly 24 percent more than last November.
“We wanted to invest and start making money,” said Maci Davey of her purchase decision, “to prepare for the future and retirement and just set ourselves up properly.”