Hattiesburg Realty
Researchers from several universities have just completed a paper that looks at what they call the hurdle rate. This is the point at which it’s equally smart to rent or buy if your only criterion is to build wealth. Based on today’s hurdle rate, it’s a better time to buy than to rent, because you can build more wealth owning than renting.
The study looks at what they call an indifferent renter. This is someone who is just as happy renting as buying depending on which choice is better at building wealth over a holding period, in this case eight years. The study assumes the renter puts the savings from renting into an investment to earn a return.
The hurdle rate is the point of equilibrium between renting and buying where it’s a wash in terms of wealth building. If today’s hurdle rate rate is lower than the average past property appreciation rate for a particular market, then it makes sense to buy, because future property appreciation should be such that an individual will, on average, create more wealth through owning rather than renting. On the other hand, if today’s hurdle rate is higher than the average past property appreciation for a particular market, then this is a sign that ownership can be a drag on wealth creation.
“It’s not a perfect reason to buy, it’s just a test,” says Ken. H. Johnson of Florida International University in Miami, one of the authors of the study, called “The Rent vs. Buy Decision,” released about two weeks ago. “But it’s a good sign that the market’s turning.”
The paper is part of a series Johnson and some other researchers have been doing on the rent vs. buy decision. This paper just looks at the narrow topic of the hurdle rate; other papers look more broadly at whether it makes sense to rent or buy based on financial considerations. In one earlier paper, renting can make more sense in some instances, at least in the short run, if renters invest all of their savings over a period of time in an instrument that generates a yield comparable to what they would earn in appreciation on a house in their market. But since few renters could realistically invest all of their savings from renting, it’s more appropriate to assume renters don’t invest all of their savings. And in these cases, owning is the overwhelmingly better investment over the holding period.
http://speakingofrealestate.blogs.realtor.org/2012/02/13/study-calls-todays-market-good-time-to-buy/
MHSAA playoffs
GIRLS
CLASS 6A
Friday
North State at Southaven
6 p.m. Southaven (28-1) vs. Murrah (18-8); 7:30 p.m. Horn Lake (23-4) vs. Columbus (23-2)
South State at Ocean Springs
6 p.m. Hattiesburg (19-2) vs. Harrison Central (21-5); 7:30 p.m. Ocean Springs (28-2) vs. Forest Hill (26-4)
CLASS 5A
Friday
North State at Oxford
6 p.m. Center Hill (25-5) vs. Lanier (27-0); 7:30 p.m. Canton (20-9) vs. Oxford (29-0)
South State at South Jones
6 p.m. South Jones (24-7) vs. Picayune (22-6); 7:30 p.m. Wayne County (19-11) vs. Long Beach (17-9)
CLASS 4A
North State at Pontotoc
Thursday
Pontotoc 52, Noxubee County 38
Gentry 56, North Pontotoc 47
Lafayette 57, Greenwood 56
Senatobia 54, Cleveland 45
Friday
6 p.m. Pontotoc (30-0) vs. Gentry (25-3); 7:30 p.m. Lafayette (14-13) vs. Senatobia (16-14)
South State at Forrest County AHS
Quitman 46, Raymond 44 (OT)
Bay High 52, North Pike 48
FCAHS 57, South Pike 48
Port Gibson 53, Lawrence County 48
Friday
6 p.m. Quitman (25-4) vs. Bay High (21-9); 7:30 p.m. FCAHS (26-0) vs. Port Gibson (26-5)
CLASS 3A
North State at Belmont
Thursday
Belmont 60, Velma Jackson 42
Independence 65, South Pontotoc 553
Ripley 68, East Side 55
Nettleton 62, Charleston 56
Friday
6 p.m. Belmont (29-3) vs. Independence (21-9); 7:30 p.m. Ripley (26-4) vs. Nettleton (23-7)
South State at Forest
Thursday
Choctaw Central 82, Raleigh 44
Franklin County 52, Forest 50
Southeast Lauderdale df. Collins
Newton 62, Morton 56
Friday
6 p.m. Choctaw Central (30-2) vs. Franklin County (24-4); 7:30 p.m. Southeast Lauderdale (24-8) vs. Newton (16-13)
CLASS 2A
North State at New Site
Thursday
New Site 67, J.Z. George 42
Mound Bayou JFK 52, Potts Camp 47
Bruce 55, Baldwyn 52
Walnut 43, West Bolivar 38
Friday
6 p.m. New Site (26-4) vs. Mound Bayou JFK (15-7); 7:30 p.m. Bruce (14-10) vs. Walnut (24-7)
South State at Taylorsville
Thursday
Bay Springs 43, East Webster 41
Bassfield 74, Clarkdale 56
Taylorsville df. Loyd Star
Scott Central df. Amite County
Friday
6 p.m. Bay Springs (19-11 vs. Bassfield (26-5); 7:30 p.m. Taylorsville (28-3) vs. Scott Central (26-6)
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