FAU Buy Vs. Rent Index Shows U.S. Housing Market Moving Deeper Into Buy Territory In Terms Of Wealth Creation

BOCA RATON, Fla., Sept.13, 2016 /PRNewswire-USNewswire/ -- The latest national index produced by Florida Atlantic University and Florida International University faculty indicates the United States housing market as a whole is moving marginally deeper into buy territory, suggesting that, on average, the majority of housing markets around the country are in good shape and remain a sound investment.

Based on numbers from the end of the second quarter, the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index comes on the heels of the latest S&P/Case-Shiller Home Price Index, which found home prices climbed nationally 5.1 percent since June 2015. Both indexes incorporate property appreciation from housing markets around the country, but unlike Case-Shiller, the BH&J Index adds additional rental, maintenance, and alternative investment data streams, among others, to indicate when and why housing markets might be changing direction.

"Housing prices, in general, continue to slow and when considered in light of the recent trends in the Buy vs. Rent Index signal that ownership remains an excellent investment for the majority of Americans," said Ken Johnson, Ph.D., a real estate economist who is one of the index's authors and an associate dean of graduate programs and professor in FAU's College of Business.

The U.S. housing market has moved marginally more in favor of home ownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds. Overall, 15 of the 23 metropolitan markets investigated are trending more in favor of ownership since last quarter.

Cities such as Honolulu, Kansas City, Los Angeles, Miami, Pittsburgh, Portland, San Francisco and Seattle are considered to be minimally in rent territory and show signs of slowing. The U.S. as a whole and all but three of the remaining metro areas remain in buy territory, favoring ownership as a way to create more wealth, on average.

"Many of the hardest hit metropolitan areas during the real estate crash are showing signs of resilience as the cost of ownership relative to the cost of renting remains more in balance," said Eli Beracha, Ph.D., co-author of the index and assistant professor in FIU's T&S Hollo School of Real Estate. "There are very few signs to indicate a market crash in these cities."

CONTACT: Jim Hellegaard, 561-319-2233, [email protected]

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SOURCE Florida Atlantic University

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