The Jump from Renter to Homeowner in Florida Among the Most Reasonable
June 13, 2017 | Magaly Fuentes
A report recently released by HowMuch.net offers an analysis of monthly housing costs by state and the differences between the cost of owning and the cost of renting. The report shows the smallest cost increase between owning and renting is in the Southeast region and in the Rust Belt. The report lists homeownership in West Virginia as the most attainable, while homes in Florida, Indiana, Arkansas and South Carolina are highlighted as reasonably attainable. The average monthly payment with a mortgage is $348 above the average monthly cost of renting in Florida.
The Buying vs. Renting a Home by State report concludes that homebuyers are willing to stretch and adjust their budgets to accommodate for this difference, in order to accomplish the American dream of owning their own home.
The number of new-homeowner households was double the number of new-renter households in the first quarter of this year, which signifies that those forming new households are overwhelmingly electing to buy a home rather than rent a home. Census Bureau data shows approximately 854,000 new-owner households were formed during the first quarter of this year, in comparison to approximately 365,000 new-renter households formed during the same period of time. It was the first time in ten years that there were more new buyers than renters, according to an analysis by Trulia.
To provide homes for the multitude of millennials eager to enter the housing market, homebuilders are changing their focus from the construction of large luxury homes to building more modest homes. In the first three months of this year, 31 percent of spec homes built by major builders were under 2,250 square feet, according to housing research firm Zelman & Associates. That points to a 27 percent increase from the first quarter of 2016.
Entry-level homebuyers are venturing into the market. First-time buyers represent about 35 percent of home buyers in 2016, a 10 percent jump over the prior year, according to the National Association of REALTOR® (NAR).
Naples Area Board of REALTORS® reported an increase of 14 percent for closed home sales in first quarter in 2017, when compared to the first quarter of 2016. Total REALTOR® sales of single-family homes in the Southwest Florida counties of Lee, Collier and Charlotte, increased to 2,198 in March 2017, the highest total since April 2015.
A look at the Buying vs. Renting a Home by State report and the closed and pending sales reports for the first quarter demonstrates that the difference in cost between renting and buying a home in Southwest Florida is not keeping potential homebuyers from entering the market.