CNN Money just released and article that confirms what real estate agents already knew: It's cheaper to own a home than to rent one. The demand for rentals is at an all time high. Some estimate the vacancy rate for homes in metro Denver is at a staggering 1.5%. Essentially, there are no homes available. When homes do come on the market, they tend to rent quickly. Thus, reducing carrying costs for landlord/owners. (Sidebar: it is an excellent time to buy investment properties with a "buy and hold" strategy. Email me and we can talk about the best price range to consider purchasing an investment home to maximize your cash flow).

The supply and demand dynamics for lease homes is causing a consistently rising rental rates. In fact, they have caught up and in some cases surpassed mortgage payments. That's great if you're a homeowner/landlord - you are cash flow positive. If you're a tenant, it's time to take another look at buying a home. Heck, you might even want to keep renting and just buy an investment home yourself and get in on the investment game.

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In addition to a continuing decline in home prices, rock-bottom interest rates have added a lot of weight to the buy side of the scale. The overnight average rate for a 30-year fixed was just 4.19% on Monday, according to Bankrate.com. A 15-year fixed averaged just 3.43%. Here in Denver, we are seeing interest rates for FHA, Conventional, conforming loans below 4%. Even investor rates are in the 4%'s. That's an amazing interest rate for investors and home owners alike.

There is also an interesting situation shaping up that few people are talking about: what is going to happen to those people who have gone through a foreclosure or short-sale? Right now, landlords/homeowners are getting multiple applications for their lease properties. They can afford to be very picky with whom they choose to rent their home. I have seen many people with bad credit, as a result of a foreclosure or short-sale, get turned away. In other words, they cannot buy a home or even rent one because of their credit. Where are they going to live?? In my opinion they will end up in areas of town that are difficult to rent for a variety of social concerns, i.e., high crime and drug use areas.

Btw, you can read the full Money Magazine article here »