Diggle's a wimp! Haha... In all seriousness the following article is not strong enough. This phenomenon is for real and I see it every day. In fact the houses I advertise for sale on this web site exemplify it.

We have seen rents increase from $1200 to $1600 to $1800 in just a few years. Plus landlords are tightening their credit requirements. This is making my customers pause and makes me wonder what people want.

Here's a real life example in Canton: 1016 Conkling Street
It's near Panerra and just down the street from Blue Hill Tavern. It's a big beautiful 2700 sq' house in Canton and perfect for house sharing. The private master suite occupies one whole floor and then the other bedrooms are upstairs. Beautiful roof top deck. amazing views, elegant.... I love it!

• Plus this house has a large "new construction" tax break for 5 years.
• It rented most recently for $2800-3000/month.
• In the first year, after tax deductions, the mortgage price would only be $1630!
• This is $1200 less than the rent of $2800! That's a lot of savings which we could all use, no?
• If you save $1200/month = $14,00 year in savings!
• Average length of mortgage (stay in a house) is 7 years = $98,000 in savings!
• That's impressive and if the market turns around in 7 years and this property is suddenly worth $100,000 more, you'll have all that equity. This scenaio is a growth of 5%/year. The market is already growing at 3% increase/year.
  

Many of you may scoff at the idea of the market turing around. Let me ask you a question. 7 years ago could you have guessed all this would have happened? Isn't is possible for it to surprise us once again and completely turn around? And aren't buyers so lucky for these lower prices and low interest rates to be able to make these purchases?

This house is now $359 and originally sold for $515-530. It had a higher price because it was the model home and has all the extras - built in surround sound... They are building another Harris Teeter within walking distance. Don't you think this property will become ever more attactive and the new grocery store will hel lock in the value?

In light of all this I'm not necessarily a hard-ass about buying - it's just so much cheaper. I know every one is so scared to buy. Let's do the math:

• If you rented out the top two bedrooms for $933 each = $1866/month
• You'd be living in this house for free plus making $266 profit/month!
• Purchasing rather than renting saves $2800/month x 12 = $3400 savings/year!!!!
• This means is if you have an income of $92K, it's like getting a raise of $34K. WOW!
• Obviously this house sharing scenario makes a lot of sense!
  

Obviously this house sharing scenario makes a lot of sense, but even if you don't share buying can be much less expensive. Check out the homes for sale on my site and PLEASE call or email me with any questions...

Home Buying Could Soon Beat Renting
By John W. Schoen, Senior Producer

Falling home prices have sent many would-be buyers to the sidelines. If all goes well, record low interest rates and rising rents may soon prompt some of them to take a second look at buying.Unfortunately, that's a big "if," according to Paul Diggle, a housing economist at Capital Economics.

Much of the decision to buy a house still depends on your personal finances and preferences, your career or family life, or level of financial security.

But if you’re comparing just the cost of owning and renting, buying a house may soon be the better choice, according to Diggle.

Until recently, home ownership was no bargain compared to renting, according to his analysis.  A 33 percent drop fall in home prices, a plunge in mortgage rates and 15 percent rise in rents since the housing crash has evened the scales. Today, the median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check. If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.

But that analysis doesn’t include the total cost of owning versus renting. A full accounting includes  closing costs, maintenance, insurance and property taxes, tax savings from mortgage deductions, gains or losses from home equity, among other factors. Renters have to think about broker fees and future rent hikes. Both have to make assumptions about future trends in housing prices and rents.

When you take those factors into account — which Diggle has done with a homegrown “calculator” — someone who plans on staying put for seven years would come out ahead by about $9,000 if they bought a median-priced home rather than being a tenant in a median-priced rental. Diggle’s calculation assumes that rents keep rising by about 3 percent a year and that house prices stay flat in 2012 and 2013 and begin rising in 2014 at about 3 percent a year.

If house prices fall further, all bets are off, said Diggle. In that case, the renters come out ahead. “At the moment, (that) downside scenario is more likely to materialize than the upside one,” he said.

Even if Diggle's calculator were to signal a “strong buy” for home ownership, he doesn’t expect that would spark a buyers' stampede. Most first-time buyers or households who lost a  home to foreclosure don’t have the 20 percent down payment many lenders are insisting on. They may also have trouble getting a mortgage without a credit score of 700 or more — a higher bar than the 650 score that was the norm for the past two decades.

“A large share of the population has dropped out of the pool of potential buyers,” he said. “Given that the choice between owning and renting a home is a luxury than many Americans simply do not have, the fact that this does appear to be the time to buy will have only a minimal effect on actual sales. Accordingly, we expect only a modest housing recovery over the next few years."

When would you consider buying a house? Leave a comment, let us know what you think?

• Now, thanks to falling prices and low mortgage rates
• Maybe next year if prices stop falling
• Never: I doubt I’ll ever be able to afford it