Buying Is 33.1% Cheaper Than Renting
The results of the latest Rent vs. Buy Report from Trulia show 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 the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!
Other interesting findings in the report include:
- Interest rates have remained low and, even though home prices have appreciated, they haven’t greatly outpaced rental appreciation.
- With rents & home values moving in tandem, shifts in the ‘rent vs. buy’ decision are largely driven by changes in mortgage interest rates.
- Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.
Real Estate Bottom Line
Buying a home makes financial sense. If you are one of the many renters who would like to evaluate your ability to buy a home this year, let’s connect so I can answer your questions.