Buying a Home is 35% Less Expensive than Renting!
In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage throughout the 100 largest metro areas in the United States.
The updated numbers actually show that the range is from an average of 16% in Honolulu (HI), all the way to 55% in Sarasota (FL), and 35% Nationwide!
The other interesting findings in the report include:
- Interest rates have remained low and even though home prices have appreciated around the country (3.9%), they haven’t greatly outpaced rental appreciation (3.7%). “In the past year, these two trends have made homeownership even more affordable compared with renting.”
- Some markets might tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
- Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.
Bottom Line
Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.
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I Totally agree with you that buying a home is better than renting. To buy a home is a great investment which will provide healthy ROI in the future.
This is true but the hard part is coming up with the down payment and closing costs.
Many cities , counties and states have down payment forgivable loans and assistance for first time home buyers and some states / counties have 0 down loans or loans with 3-3.5% down….. don’t assume you can’t , contact a Realtor in your area, or email me. Let’s see what can be done!
Indeed there are many options out there in the lender’s arena- and many cities have 1st time homebuyer type of programs. The most important thing to know is how motivated are you to consider building wealth and equity- if it is important to you then having a home is definitely a consideration to take on with the right mindset – dreams do come true.