Research Shows Homeownership More Affordable Than Renting in Many U.S. Cities

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Moody’s Analytics Study Shows Price-to-Rent Ratio Below 20 in almost 75 Percent of Major U.S. Cities

ATLANTA--(BUSINESS WIRE)-- Real estate and investment experts are urging prospective homebuyers to purchase a home now as part of a long-term savings and investment solution. In recent reports, the national home affordability index is at its highest levels since 1971. The New York Times reported in April 2011 “In some once bubbly (real estate) markets, prices have fallen so far that buying a home appears to be a bargain, based on a New York Times analysis of prices and rents in 54 metropolitan areas.”

“There is no better time to buy a home with mortgage rates at an all-time low and home affordability rates at an all-time high,” said Tim Burford, CEO/Managing Partner at First Option Mortgage. “First Option’s mortgage professionals across the country are seeing that even in cities where it was traditionally cheaper to rent, home affordability has shifted to where it makes more financial sense to buy.”

Rent ratio is calculated by dividing the sales price of a house by the annual cost of renting a home. Industry experts consider a ratio below 15 as a market indicator that it is better to buy a home; a ratio of 16 to 20 as more financial sense to buy even though it is less expensive to rent; and a ratio over 21 as home ownership costing more than renting.

Economists at the National Association of Realtors are expecting rent cost to increase 3 to 5 percent over the next two years; making a good case for current renters that are staying put in an area for more than five years – to consider purchasing a home. The new renting and homeownership data support traditional qualitative benefits of buying homes, which includes pride in ownership.

For more details on your city please visit The New York Times article via: http://www.nytimes.com/interactive/2010/04/20/business/20100420-rent-ratios-table.html

About First Option

First Option Mortgage & Lending is a leading U.S. home mortgage and finance lender, founded on the belief that customers must save money, be treated with respect and understanding, and deserve excellent personal service. First Option helps customers find and create the best mortgage loan and refinance packages – suited just for them. With an average loan closing of eight days, First Option operates efficiently to save customers time.

First Option offers a full range of mortgage and home finance programs including: conventional loans, FHA loans, VA loans, USDA loans, reverse mortgages, second mortgages, no-closing-cost loans, fixed-rate mortgages, adjustable-rate mortgages, lines of credit, jumbo mortgages and home mortgage refinances. First Option services 39 states and Washington, D.C. and has a local branch presence in Atlanta, Columbus, Denver, Indianapolis, Jacksonville, Minneapolis/St. Paul, Phoenix, Portland, St. Louis, Salt Lake City, and Las Vegas. Founded in 2004 by Tim Burford and Kurt Nikolai, First Option is known as “The People You Call First” for mortgage lending needs. For more information visit www.firstoptiononline.com.