Buying vs Renting Homes In Las Vegas

Buying vs Renting Homes In Las Vegas? Traditionally, renting has been the more affordable option compared to buying. But things are changing as rent prices continue to soar. According to recent data released by Zillow, the aggregate amount of rent spent in 2014 by U.S. renters was a whopping $441 billion. Yes, that’s billion, with a B. That staggering total represents a nearly $21 billion dollar increase over last year.

Because renting has been less expensive than buying a house, those with lower incomes and poor credit scores would choose that route. In today’s Las Vegas market, that axiom no longer holds true. For many, buying is simply the more affordable choice compared to renting.

But why? It’s simple economics. When demand outpaces supply, prices go up. Las Vegas homes were hit hard by the mortgage crisis so many homebuyers became renters because of credit issues or the fear of buying again. The result - more renters and less buyers.

A recent study by Zillow showed that renting is half as affordable as buying, and that rent prices are expected to rise in the coming years with no signs of slowing. It has created opportunities for investors and rental property owners, but has also burdened the average renter financially.

Isaac Lidsky, CEO of ODC Construction, says his economic numbers show it’s at least 20% cheaper to buy than rent. A J.P. Morgan report showed that during the end of 2014, it was 19% cheaper to buy a house than rent. So why are so many people reluctant to buy when rental prices are sky-high and only escalating?

It boils down to fear and lack of education. Many current renters, who were once proud homeowners, were psychologically and financially scarred by the market collapse when they lost their home. Many believe it takes the requisite seven years to get back into a rebuying position after declaring bankruptcy, but in many cases it takes only two years or less.

Others are embarrassed to have their credit scores checked after declaring bankruptcy or going through foreclosure. They feel ashamed and isolated. But remember, millions of others have gone through the same thing over the past few years. You’re not alone.

So we know rent in Las Vegas isn’t getting cheaper, but that’s not the only reason to buy. Interest rates are under 4% and there are plenty of great loan programs out there for people.

I’m not saying homeownership is for everyone. But the current market conditions warrant many renters to consider looking into buying a home in Las Vegas. I’ve helped Las Vegas renters for over ten years realize the dream of homeownership while maximizing their financial positions by switching from renting to building home equity.

For more information on the first steps to buying a home in Las Vegas or your first time buying a home please don't hesitate to call me directly at (702) 321-1763. I’m here to help!