Buying A Home Still Beats Renting By 35 Percent in America’s Biggest Cities

It is still cheaper to buy than rent in many of the biggest U.S. cities, despite rising home prices and mortgage rates. A new Trulia study finds that, nationally, it is 35 percent cheaper to own a home. Even in notoriously renter-heavy cities like New York and San Francisco, it is still 21 percent and 9 percent more affordable, respectively, to own. Trulia chief economist Jed Kolko comments, “Recent mortgage rate and home price increases have made buying significantly more expensive than last year, but not enough to tip the math in favor of renting. This is because rates remain well below historical norms, and prices are still slightly undervalued, too.” Mortgage interest would have to hit double-digit levels before the tide would turn in most markets, he notes. Nonetheless, Kolko concedes, the gap between owning and renting is narrowing. Nationwide, it was 45 percent more affordable to buy than to rent a year ago. Of the 100 biggest metropolitan areas that Trulia tracked, all but one — Springfield, Mass. — saw the cost of homeownership move closer toward the cost of renting. | Read More