Buying Is Cheaper Than Renting In ¾ of U.S. Cities
Popular real estate web site, Trulia recently reported that “buying was cheaper than renting in 74% of the country’s 50 largest cities in July”. The report, which can be viewed here, states that the few exceptions to this statistic are New York, San Francisco, and Seattle. For example, the survey notes, “[e]ven though rents average $2,980 a month in New York (the highest of any of the 50 markets), it’s still the best city for renters […] Paying for the same kind of two-bedroom Manhattan apartment would cost 36 times as much, nearly $1.3 million”.
This phenomenon is likely a result of the huge drops in interest rates countrywide. Although it’s generally a buyer’s market, there are several factors to consider.
It seems that the cities that are best suited for buyers are ones that have been hit hard with foreclosures. This is especially true in cities like Las Vegas, Phoenix, and Sacramento. However, there are also cities like Miami, where the affordability of a home versus renting is more uncertain due to a lot of recent change in the price-to-rent ratio.
Beyond location, those who qualify for home loans should also consider their own tax bracket and how long they are willing to commit to staying in their new home. Anything under 7 years, and most homeowners cannot expect to profit off the sale of the house.
Courtesey of CNNMoney and Trulia.com
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