Rent vs. own

How the interest rate makes owning almost a no brainer

 

Right now in Yellowstone County the average priced home sell for $212,242 and the median priced home sell for $188,000.using those figures than comparing renting to owning shows the power of interest rates and moderating prices in the market place. Your total payment on an average sales priced home is $1294.82 per month that compares to $1040 to rent the verge home in Yellowstone County. The median sales price home costs $1146.00 per month as compared to $950 to rent the median priced rental home in Yellowstone County right now. On the surface it appears that owning is more expense than renting. Yet when you do a full comparison owing the average price home actually costs $887.84 and the median ownership cost is just $787.85 per month. Median family income for Billings is $63,000 according to FFIEC CENSUS AND HUD ESTIMATED reports so the family with the median family income has 109.47% of the income required to the average priced home and 123.69% of the income needed to buy the median price home in Yellowstone County.

Below is a chart showing how to compare the numbers and what went into the comparison.

 

rent versus own in today’s market

 

 

house payment make up

 

 

 

 

 

average sales price purchase

$212,242

 

 

 

 

median sales price purchase

 

$188,000

 

 

 

maximum fha loan @ 30 years 4.375%

 $1,059.66

 $938.66

 

 

 

taxes monthly

    $151.83

    $140.67

 

 

 

insurance monthly

      $83.33

      $66.67

 

 

 

total payment

 $1,294.82

 $1,146.00

 

 

 

tax savings monthly in the 15% tax bracket

$137.98

$123.15

 

 

 

debt pay down monthly

    $269.00

    $238.00

 

 

 

net house payment after tax and debt reduction

    $887.84

    $787.85

 

 

 

average & median rental rate for a Billings home

 $1,040.00

    $950.00