Is buying cheaper than renting in Seattle?
A new report found that buying is much cheaper than renting in all of the 100 largest metropolitan areas, including Seattle, according to the Seattle Post-Intelligencer. Owning real estate in Seattle is, on average, 42 percent lower than renting.
The report found that the average homeownership cost per month in the metropolis is $978, and rents continue to rise while mortgage rates are at all-time lows. However, some people are simply renting because they cannot afford to save up for a down payment or qualify for a mortgage. According to MSN Real Estate, the average salary a home buyer in Seattle needs to earn is $43,186, and the average home price is $290,700. Mortgage rates in the Emerald City are around 4.04 percent.
Many are renting because it can take years to save up for a down payment, and although the country has been out of the recession for a couple of years, many found it difficult to save during that time. This also translates to people having less-than-enviable credit scores, according to the report.
Across the country, statistics are showing similar trends, and by wide margins. According to the Post-Intelligencer, the report had many calculations going into the rates. For instance, a homeowner would need to keep their property for seven years and itemize their taxes to deduct mortgage interest. Other factors included closing costs, insurance, property taxes for purchases and security deposits for rentals.
Similarly, the number of foreclosures has risen much more quickly in the Seattle region that it has in much of the country, which gives homebuyers an opportunity to purchase lower priced homes. In King County, foreclosure filings in August were up 32.2 percent from July, and 34.2 percent compared with July 2011.
The amount of homes that are threatened by foreclosure has gone down in the past few months, driving median sale prices up, but experts believe there is going to be a rebound of more foreclosed homes on the market to bring the price down.
"The rebounding activity in Washington state is likely the result of lenders catching up with foreclosures delayed by a state law that took effect in July 2011 and allowed homeowners facing foreclosure to request mediation," Daren Blomquist, a local real estate expert, said in the report. "This rebounding pattern will likely be repeated in the coming months in other states that have passed legislation delaying the foreclosure process."