Put mortgage interest rates, stock and bond market values and other factors side-by-side and you may find in Miami and 22 other U.S. markets, it's more cost effective to rent instead of buying a home right now.
That's the conclusion of the quarterly Beracha, Hardin and Johnson Buy vs Rent Index.
FIU Hollo School of Real Estate Director Eli Beracha acknowledges Miami has some of the highest rental prices in the country, but he notes ownership is costly here too. So if you rent and set aside the money that would have been used for the down payment and ownership costs, "and re-invest this money in a portfolio that involves, stocks, bonds or even real estate, according to our calculation they're likely to be slightly ahead."
Of course, the factors are different for each individual.
If you already own, Beracha says don't worry because the economy is strong, interest rates are low and construction costs are high.
"I strongly believe that you will not see a correction in housing prices, at least not something that is significant. Instead, what we we're likely to see is a just slower rate of price appreciation," says Beracha.
He feels that should bring the market to where it should be over the next few years.
Buying is currently favorable in cities including New York and Chicago.
Click here to see the entire report.