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Buying is Now 37.7% Cheaper Than Renting in the US

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Buying is Now 37.7% Cheaper Than Renting in the US | Keeping Current Matters

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 17.4% less expensive in Honolulu (HI), all the way up to 53.2% less expensive in Miami & West Palm Beach (FL), and 37.7% nationwide!

Other interesting findings in the report include:

  • Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
  • Home prices would have to appreciate by a range of over 23% in Honolulu (HI), up to over 45% in Ventura County (CA), to reach the tipping point of renting being less expensive than buying.
  • Nationally, rates would have to reach 9.1%, a 145% increase over today’s average of 3.7%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.


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20 Responses to “Buying is Now 37.7% Cheaper Than Renting in the US”

  1. Mark Fendelman November 25, 2016 at 6:50 am # Reply

    This epic battle between renting and buying will continue forever. We should consider buying when the prices are good, even if we need some extra financial help. In the long run, it will be worth it.

  2. Sean December 4, 2016 at 5:17 pm # Reply

    So if a home requires 10%-20% as a down payment, and renters spend 100% of their income on shelter, transportation, and food….. How does one save 10%-20% for a down payment on a home?????

    • Bob February 21, 2017 at 4:06 pm # Reply

      Quite easy to get 100% financing, just talk to couple good agents and they can put you in touch with some good lenders to see if you qualify !

    • Doug February 21, 2017 at 7:42 pm # Reply

      There are many down payment assistant programs out there available, and the best part is that you don’t have to pay it back!!

      • Naim Payne April 2, 2017 at 4:11 pm # Reply

        Please tell me where ?

        • Jean April 6, 2017 at 2:37 am # Reply

          USDA LOANS

      • Bev April 2, 2017 at 10:22 pm # Reply

        Where can I find down payment assistant programs for S. California residents?

        • Jean April 6, 2017 at 2:38 am # Reply

          USDA loans

    • Graham L February 28, 2017 at 9:41 pm # Reply

      No need to even go FHA. Anybody can go 0% down and keep their low interest rates. The only thing stopping people is the fear of the word “Mortgage”.

    • Marcie Evans March 8, 2017 at 2:34 pm # Reply

      Not the case! If you have enough for earnest money and an inspection, you are likely good to go! If you are in the NW Atlanta area, give me a shout and I’ll gladly help you out.

    • Donald March 14, 2017 at 7:10 pm # Reply

      Sean, you should contact a good Realtor in your area. They can hook you up with a Mortgage Broker who has many different loan programs, some with very little to no down payment. That’s a great way to start.

      Donald Hubbell
      Coldwell Banker Premier Realty
      St. George, UT.

    • Bob Baldwin March 17, 2017 at 9:32 am # Reply

      Sean, 10%-20% is a nice down payment, but it’s not required. There are choices out there that offer an opportunity to put down significantly less as a down payment. Talk to a mortgage professional to find out your options…there’s no obligation to act, and if you do decide to purchase, getting preapproved by a lender is necessary in most areas in order to present an offer.

    • Jean April 6, 2017 at 2:36 am # Reply

      USDA loans 100% financing

    • Peggy April 22, 2017 at 11:15 pm # Reply

      There are many programs to help first time buyers. The best thing you can do is contact a Realtor and ask them to recommend a loan officer. Most Realtors have preferred lenders that they have done business with for years and years. They are trustworthy and know what they are talking about.

    • Jay Lee May 2, 2017 at 9:36 am # Reply

      DPA…down payment assistance. Also there is FHA and a new conventional loan for 3% down. Lots of options out there.
      Jay Lee

    • Johncap523 May 18, 2017 at 8:01 pm # Reply

      Guess how much you need to rent? typically three months rent! Not much less than you can buy with actually!

  3. Mike February 26, 2017 at 11:09 am # Reply

    Especially for first time home buyers. An fha loan requires very little down payment

  4. Andrew March 13, 2017 at 2:16 pm # Reply

    There are plenty of ways to make up for not having the mythical 20% down. You’ll need a little money for Earnest Money but beyond that you can do it.

  5. Janelle Endres April 15, 2017 at 9:51 pm # Reply

    Also, for those who have served in the military past or present with an Honorable Discharge the VA loan product is available with NO downpayment and NO PMI for not having a 20% downpayment. Also, many times eligible veterans do not realize they can use the VA benefits more than once.
    You still should have “earnest or escrow” money for the contract and you still will need money for inspection and appraisal but all this is minimal compared to FHA and paying Private mortgage insurance FOREVER with a FHA loan. There is a VA funding ‘fee depending on if you are disabled or not–one time fee that can be rolled into the loan.
    Most of the seasoned REALTORS can write an offer that the Seller pays your “closing cost & prepaids” so you may come to closing with ZERO $$ sometimes.
    Yes, there are other programs as mentioned and I can help direct for the “loan product” that you are looking for to purchase your home.. Just didn’t see Va option mentioned.
    Janelle

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