Homes for sale in Nashville continue to be a better financial option than rentals. According to a report on Trulia, buying a home in the Nashville market is from 6 to 52 percent less expensive than renting.
It was stated that the average monthly cost of home ownership is $681 for homeowners who puts 20 percent down, takes out a 30-year fixed-rate mortgage at 3.5 percent interest, itemizes tax deductions at the 25 percent bracket and stays in the house for seven years.
The average monthly cost of renting during the time of the report was $1415, which is 52% more expensive. It was shown that the national average is 44 percent. This advantage for buyers will start to go away though once mortgage rates rise. With a 5.5% interest rate, the advantage of homeownership would be lowered to about 6%.
That advantage likely will contract even more this year, said Jed Kolko, Trulia’s chief economist.
“Although buying a home is still cheaper than renting, the gap is closing,” he said. “In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.”
It was reported in the Tennesseean , that Nashville rent prices were 6.7 percent higher in January than a year earlier, while homes for sale asking prices rose by 4.8 percent over the past year.
If you have been going back and forth on deciding whether to buy or rent a home in Nashville, this latest report shows that purchasing a home now before rates increase, is considered to be more advantageous than renting.