A new study by the Real Estate Initiative at Florida Atlantic University has found that using your savings for renting and investing is currently a better choice than buying a home in the Philadelphia area, writes Miles Bryan for the WHYY.
The university’s ‘Buy vs. Rent Index’ annually compares returns from home equity and the stock market in 23 metro areas. This year, it has found that the Philadelphia area residents who want to invest their savings are likelier to see a bigger return buying stocks and bonds than buying and maintaining a home.
The study also found that housing prices in the Philadelphia metropolitan area are approximately ten percent higher than they should be according to the long-term cost trends, while the cost of renting in the area has remained relatively low.
But to make the renting strategy truly succeed requires a lot of financial discipline.
People would have to “reinvest everything they would otherwise put into homeownership… maintenance, property taxes, insurance, homeowners association fees,” said Ken H. Johnson, real estate economics professor at Florida Atlantic.
Read more about renting versus buying at the WHYY by clicking here.