Mortgage rates continued rising in the last week, breaching 4 percent for the first time since last summer, according to Freddie Mac’s latest Primary Mortgage Market Survey. Freddie Mac’s
San Diego Neighborhoods
Rent vs. Buy Report: San Diego Neighborhoods
By Jennifer Riner, Trulia
Many renters dream of purchasing their own property to build wealth. But, there’s another financial benefit of homeownership that often goes overlooked – spending less on your mortgage than you would on rent. In every major city throughout the U.S., it’s cheaper to buy a median-priced home than it is to rent a comparable property. In some cities, the cost savings range as high as 50 percent.
San Diego’s median rent this past spring was $2,500 while the median home value was $528,318. Although median home values rose 6.8 percent and rents remained flat year-over-year, homes in the San Diego metro were 25.8 percent cheaper to buy than to rent.
Keep in mind, these calculations assume several details. First, to realize such savings, you’ll need to put 20 percent down and reside in your home for at least seven years before selling. And, Trulia’s Rent vs. Buy scenario also factors in a 4.1 percent interest rate on a 30-year fixed mortgage.
Prices in San Diego vary considerably depending on neighborhood. To get a better idea of just how much you might save when purchasing a home, consider the following neighborhoods’ rent vs. buy results.
Clairemont Mesa East
Currently, it’s 22 percent cheaper to buy than it is to rent in Clairemont Mesa East with a 3.75 percent interest rate. In the last year, home prices in Clairemont Mesa East jumped 10.2 percent to reach a median $563,000. Three months ago, the median home price in the neighborhood was $525,000. However, the median rent is now a high $2,695 per month.
The median home price in Allied Gardens jumped a slight 0.7 percent in the last year to $550,000 while the median rent rose to a steep $2,595 per month. At the same 3.75 percent interest rate provided above, it’s 18 percent cheaper to buy than it is to rent in Allied Gardens.
Finally, Mira Mesa home buyers can save 20 percent by purchasing a home with a 3.75 percent interest rate instead of renting. Mira Mesa’s median home price is $526,500 – up 3.2 percent since last year. Rents in Mira Mesa dipped slightly to $2,462 since reaching their annual peak in May ($2,550).
Not only can home buyers in San Diego look forward to spending less, the money paid goes toward a personal investment instead of your landlord’s mortgage. If you’re looking to minimize your monthly financial burden, the first step is launching a San Diego property search. Getting to know the market and its home prices helps prospective buyers decide if a home purchase is feasible and how much they can expect to save over the long-term. When you’re ready to buy a home, save each month and invest in your future finances simultaneously, contact Route 56 Realty.
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