Rent, or buy? BUY!
COEUR d'ALENE — A new study ranks Kootenai County third among the state's 44 counties where buying a home is a better financial option than renting.
The study by SmartAsset, a financial technology company, compared average rent and home prices to find the places where buying makes the most sense.
The average monthly rent here is $1,274, among the highest in the state, and the average home price is $280,483, according to the study.
"The break-even year in Kootenai County is 2.0 years, which means that it takes two years for buying to be more cost-effective than renting," said A.J. Smith, SmartAsset's vice president of financial education.
Jennifer Smock, of Windermere/Coeur d'Alene Realty, said the ranking is not a surprise.
"We have known for years now that it makes financial sense to purchase a home in our area versus rent," she said. "The affordability factor is still there in our area. An entry-level property can be purchased for around $200,000 and, with the right financing options for first-time buyers, it will still make a monthly mortgage payment less than rent in some areas."
Kootenai finished behind only Latah and Caribou counties in the rankings. Shoshone County, which has one of the lowest average home prices in the state at $175,582 but a relatively high average monthly rent of $966, finished fourth in the rankings with a break-even point of 2.1 years.
Statewide, the average monthly rent is $1,071 and the average home price is $252,905 for a break-even point of 2.6 years.
Rob Brickett, general manager for Coldwell Banker Schneidmiller Realty, said if people indeed are interested in putting down roots in Kootenai County, buying a home generally makes better financial sense.
"People can get a lot of bang for their buck and choose that home they've been dreaming of," he said. "A lot of Americans are ready to make lifestyle changes and are choosing this area to live that lifestyle. If you know you're going to love this area, know that this is a healthy real estate market.
"In some situations, it may be prudent for someone to rent if they want (to try the area). It's not a one-size-fits-all, but for most, buying is a great path to be on as long as it's right for your lifestyle."
SmartAsset officials agree.
"In the end, the rent vs. buy decision comes down to your preferences and plans," said a written statement. "If you know exactly how long you want to stay in your home and where you want to live, and you have some money saved up, the decision could be as easy as calculating which option will cost you less. If your future is less clear, however, you may have more to consider."
Smith said SmartAsset released the study to get people talking about major personal finance decisions such as buying a home.
"We hope people see these numbers and start thinking about what makes the most financial sense for them in terms of renting or buying a home," Smith said.
The study used data from the U.S. Census Bureau 2016, U.S. Department of Housing and Urban Development, and American Community Survey. For the "buy" scenario, the study assumed a mortgage rate of 4.5 percent, closing costs of $2,000 and a down payment of 20 percent.
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