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Buying is Now 37.7% Cheaper Than Renting in the US

Buying is Now 37.7% Cheaper Than Renting in the US

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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22 replies
  1. Sean
    Sean says:

    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?????

    Reply
  2. Janelle Endres
    Janelle Endres says:

    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

    Reply

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