A study from Trulia shows it is cheaper to buy than rent in the 100 largest metropolitan areas of the United States:
With a 20% down payment, a 30-year fixed mortgage rate at 3.5% and at the 25% federal tax bracket, homeownership is cheaper than renting in all of the 100 largest metros by a wide margin. There is no market where the financial decision is even close, so long as you plan to stay in the home for at least seven years, get 3.5% mortgage, and itemize your tax deductions. However, how much cheaper it is to buy a home than to rent really depends a LOT on where you live.
In Rochester, the study found the monthly cost of home ownership is $790, while the monthly cost to rent is $1,358. Trulia based monthly costs on the average across all properties, for sale and for rent. Home ownership costs include mortgage, maintenance, insurance, property taxes, closing costs and other costs. Renting costs included rent, security deposit and insurance.
I think those rental figures are high. The 2010 census shows only 27.9 percent of housing units with a mortgage had monthly housing costs below $1,000. Only 18.1 percent of rental units cost more than $1,000 a month.
Buying a home has tax advantages and builds equity, but it’s far more economical for me to rent, according to numerous calculators. Try this one.
Links of the Day:
- Chicago teachers and the school district have reached an agreement in principal and teachers could be back to work on Monday.
- Kodak may abandon its patent sale, meaning the scramble for cash is on.
- Fuji is getting out of the motion picture film business, which is a boost for Kodak.
- In Rochester and elsewhere, doctors are “firing” parents of patients who refuse to get vaccines.