Online property tracker Trulia says buying a home is more affordable than renting in all 100 U.S. largest metro areas it tracks.
Deeply discounted homes – even with some recent price firming – plus record cheap mortgages is making house shopping a money saver, by this math.
This is a key reason why homebuying is up – best prime selling season in DFW metroplex since 2008, for example. It’s probably frustrating those families with poor credit, weak finances or job prospects, or people stuck in homes worth far less than the mortgage, who cannot take advantage of buying opportunities.
Trulia studied homes for sale and for rent in its key markets this summer – June through August – and look at the associated comparative living costs of a buyer and renter including transaction expenses, taxes and opportunity costs over the long run.
Bottom line to Trulia: “With a 3.5 percent mortgage, itemized deductions at the 25 percent federal tax bracket, and a seven-year time horizon, 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 is just 24 percent cheaper than renting in Honolulu – the place with the smallest buying advantage. (In Orange County, by Trulia’s math – it’s 34 percent, ranking the local advantage as tied for 7th smallest, with San Diego, out of the 100 analyzed!)
Compare those advantages to Detroit. That’s where buying is 70 percent cheaper than renting. In Gary, Ind., and Oklahoma City, the advantage was a 63 percent savings for the house buyer.
Jed Kolko, Trulia’s chief economist. “Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes … If buying a home is cheaper than renting in every major metro and makes financial sense in most situations, then why aren’t more people buying? The reason is because many people can’t take advantage of today’s affordability.”
If you are a renter and looking into buyer – please contact me and I will be more than happy to do a cost saving benefit for you! You can email me at firstname.lastname@example.org!
Realtor, JP and Associate.