Owning Still Cost Less Than Renting

 

Buying costs less than renting in all 100 large U.S. metros, according to the Rent vs. Buy Report from Trulia. Rising rates and home prices have narrowed the gap between renting and buying — yet historically low rates have kept homeownership from becoming more expensive than renting. Trulia says that at a 30-year fixed rate of 4.5%, buying is 38% cheaper than renting nationally, versus being 44% cheaper at the start of 2013.

The range of difference, as one expects, varies from market to market. Trulia’s interactive Rent vs. Buy Map shows how the math changes under alternative assumptions for the rate, the income tax bracket for tax deductions, and the number of years that one stays in the home. To compare the costs of owning and renting, Trulia’s model assumes buyers get a 4.5% rate on a 30-year FRM with 20% down payment. Further, it assumes buyers itemize their federal tax deductions and are in the 25% tax bracket; and will stay in their home for seven years.

Under these assumptions, buying is 38% cheaper than renting nationwide, taking into account all of the costs and proceeds from buying or renting over the entire seven-year period.

Source: Housing Wire

 

To access Trulia’s Rent vs. Buy Map

 

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