"The true foundation of republican government is the equal right of every citizen in his person and property and in their management." --Thomas Jefferson to Samuel Kercheval, 1816.
I believe that the single greatest gift that this wonderful country offers is the fundamental right to own land. It was arguably the basis of our Constitution. But it still makes me scratch my head when I see so many folks still renting. You can read a good article on Renting vs. Owning here.
But let’s look at some quick numbers on the home front. In general, a nice 3 bedroom apartment in Northern Virginia will run you $1500 - $2000 depending on the location. Let’s split the difference and say $1750. The average sales price in Prince William County for 3rd quarter 2007 was $395,000. The current 30-yr mortgage rate is around 5.8%. You can play with the number using the Ginnie Mae website and determine what fits your personal profile.
As I see it, with 100% financing and staying 5 years, so long as home values increase at least 1.2% annually (remember I saw almost 12% over the past five), buying wins out. I don’t have a crystal ball, but I’ve got to believe that the market will do better than 1.2%.
So if you are now renting, plan to stay longer than 5 yrs in the area, and have the monthly cash flow support, I have to ask: “Why are you passing on the your greatest American right? The right to own land.”