It‘s now better to rent than own in Denver, report says
Aug 30.2018,8:16am MDT
As far as wealth creation is concerned ,it’s now better to rent a home than own one in Denver.
That is the conclusion of the Beracha, Hardin & Johnson Buy vs. RentIndex, a quarterly index produced by Florida Atlantic University and Florida International University.
Of the 23 cities covered in the index, 16 of them,including Denver,are in rent territory,meaning renting and reinvesting,on average,will outperform owning and building equity in terms of wealth creation.The last time U.S. housing markets were in rent territory was June 1999. In January 2010,U.S.markets crossed back into ownership territory and have remained there until now.
The index predicts that Denver,along with Atlanta, Dallas,Honolulu,Houston,Kansas City,Los Angeles,Miami,Minneapolis,Philadelphia, Pittsburgh,Portland,San Diego,San Francisco,Seattle and St. Louis,will all experience downward pressure on the demand for ownership.
According to the study,the best buys in the country right currently appear to be in the mid west end northeast, with Chicago and Cleveland getting the best ownership scores.Others with positive ownership scores were Boston,Cincinnati,Detroit, Milwaukee and New York City.
“It is clear that we are at a point where markets will begin to see downward pricing pressure,implying in some markets annual pricing increases will begin to slow,• said Ken Johnson,a real estate economist and one of the index’s creators in FAU’s College of Business,in a release.
According to Eli Beracha, co-creator of the index and director of the Hollo School of Real Estate at FIU, recent jumps in home prices play a big role in moving the market to benefit renters.”Currently,the biggest driver for moving the U.S.into rent territory is the fact the cost of ownership is out pacing the cost of renting a like-kind property,” Breech said