Unless you’ve been living under a rock for the past five years, you know that in some parts of the country, housing prices have plummeted. But what you may not know is that in some cities, it is cheaper to buy a new house than a new car. Yes, you can buy a home for less than the cost of a moderately priced vehicle.
Rusty Weston of 24/7 Wall St. examined median housing prices in some of the hardest-hit communities and then compared these values with new car prices. Number one on Weston’s list was Detroit, Mich., with a median listing price for homes of $21,000. This is also the price of a new Chevy Malibu. If you’re seriously deciding between a house and a new car and the Malibu isn’t to your liking, perhaps the more fuel-efficient Toyota Prius c “Three” trim at $21,635 would interest you.
Flint, Mich., was the second community on Weston’s list, but to buy a home in this community, you’d need to increase your budget by about $11,000. If you’d rather spend $32,000 on a new vehicle instead of a house, you could purchase a shiny new BMW 128i Coupe.
Although I know there are people out there who would rather buy a new car than a house, is it wiser to spend $32,000 on a new BMW than it is to buy a house with a mortgage payment of about $200 a month (assuming a 20 percent down payment)? Believe it or not, this isn’t an easy question to answer.
“In hard-hit cities, why own a home when you can rent one without the risk of foreclosure if your job falls through? Or, for about the same money, you can sport new wheels, facing only the risk of repossession — a lesser credit report complication than a foreclosure. While a car is unlikely to increase in value, its depreciation is both more manageable and predictable than a home.” Source: NBCNews.com
If you lived in Flint and had to choose between a car and a house, which would you choose?