Should I Rent or Buy in Portland? Zillow economists say Buy!
Rent in Portland is growing at TWICE, yes TWICE, the national average, reports Zillow. How does the cost of renting compare to buying? You better sit down. Homeowners will spend about 21% of their monthly income on their new mortgage, while renters will cough up a whopping 31%! Zillow also reports, that as of May, the average rent in Rip City tipped in at $1,629 per month.
This year has been particularly hard on renters. Many have seen monumental 30%+ rent increases and no-cause evictions, while developers capitalize on the sizzling hot Portland real estate market. In an effort to give voice to the disenfranchised, members of the local community have organized to form the Portland Renters’ Assembly. Their prominent goal is to enact a rent control policy, a tool used in some cities that sets a cap on the amount that a landlord can raise rent.
The Alternative – Fight the Power!
And, Become a Proud Homeowner.
Consider The Following:
- Mortgage rates are still at historic lows.
- Real Estate is a solid investment – Portland home values are expected to increase almost 6% in the next year. Home values rose nearly 7% from 2014 to 2015.
- Cost Analysis might show that you are paying more in rent than you would on your new mortgage. Not sold? Try out Trulia’s awesome Rent vs. Buy Calculator. Plug in your rent and the value of the property that you are eyeing; and, voila, Trulia spits out an instant comparison. It’s an approximate figure, of course, but come out of the clouds and get some concrete numbers under your feet!
- Federal Housing Administration (FHA) loans are set up to bolster first-time homebuyers by requiring only a low 3.5% down payment. And, they recently lowered the insurance premium, making your monthly mortgage payment even lower.
- The Portland Housing Bureau (PHB) offers an assortment of assistance programs for first-time home buyers. To lower your monthly mortgage payment and create more disposable income, ask about the Mortgage Credit Certificate (MCC).
Break Even in 1.2 years –
Many first-time home buyers get nervous at the initial investment that comes with securing a mortgage. So, in a more apples to apples approach, Zillow analyzed the costs, transaction fees, inspections, insurance ect. of buying a new home in Portland. That amount was then compared to the true cost of renting, including rent and deposits. Considerable line items, such as future home-value appreciation, tax breaks, and rent growth, are factored in as well. The analysis shows that, when buying, the “breakeven point” in some areas is as low as 1.2 years.
A qualified realtor can assist you in securing a loan officer, scoping neighborhoods and home values, and evaluating where the local market is headed. For more information, contact the team at Home Sweet Home Realty.
Written by Jennifer Kane, Expanded Exposure LLC.