Homeownership cheaper than renting nationally

To piggy-back on my last blog, this is another take on the subject, which fascinates me, in this area where most real estate seems so expensive for a lot of people.

Trulia’s Summer 2012 Rent vs. Buy Report, which provides information on whether buying a home is more affordable than renting in America’s 100 largest metropolitan areas, found that homeownership is cheaper than renting in all of the 100 largest U.S. metros by a wide margin.

However, relative affordability depends largely on location. Buying a home is 24 percent cheaper than renting in Honolulu, 28 percent cheaper in San Francisco, and 31 percent cheaper in New York, but is 70 percent cheaper in Detroit. However, the actual dollar amount reveals that despite a low 28 percent difference in buying versus renting in San Francisco, the monthly dollar savings is big ($899) because rents and prices are so high in this region.

Note: Cost of homeownership assumes that the home is sold after seven years and includes closing costs, maintenance, insurance, property taxes and other costs. Cost of renting includes security deposit and renters insurance. Monthly costs are based on net present value of costs averaged over seven years, and based on the average across all properties listed in the metro area, including those for sale and those for rent, in summer 2012.

More info on this article from Trulia.

Thanks for reading, your comments are always welcome!
Francis

Silicon Valley Real Estate

Local market trends

useful links

A noteworthy web site: junk mail reducer: Catalog Choice

Renting vs buying... an age-old quandary.

In 75% of the US one gets ahead within 3 years by buying a home vs continuing to rent.

Typically, and historically, it was kind of understood that it takes about 3 years to see the advantages of owning instead of renting.  The first years, most often, it seems a lot more expensive, and you do not see yet the tax advantage, when there is one. Then you settle in and start feeling "at home" vs leasing you space in life, and that adds to the financial aspects of the question.

But now that prices have moved a lot and in different ways throughout the US, it is not so straightforward.  In short, where prices have fallen the most would be where it is most attractive to buy, vs to rent.

This study from Zillow gives more detailed information on the new quirks and wrinkles of this age-old quandary.

Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates