Forbes: Buying Beats Renting By 38%
Buying a home is still cheaper than renting one in every single one of America’s 100 largest metropolitan areas, according to a report out today from San Francisco-based real estate data firm Trulia. On average for the nation, owning is still 38% cheaper than renting.
In Detroit, Mich., where it is a whopping 63% cheaper to buy than rent, the decision should be fairly easy. In Honolulu, Hawaii, where it is only 17% cheaper to buy than rent according to Trulia’s calculations, the decision might be a bit harder. A key factor in whether the numbers add up: what type of mortgage buyers can get. With rents fairly high, economists have pointed out that first-time home buyers are possibly having a harder time saving up for that 20% down payment.
“The reason we looked at different mortgage types now is because saving a down payment remains the biggest obstacle,” says Jed Kolko, Trulia’s chief economist and the report’s author. “Many people are looking to other types of loans. But putting less down can make buying more expensive. So the key question is: does it still beat renting?”
Test out Trulia’s Rent-Versus-Buy Calculator to see if buying a new home is a better option for you.