Still Cheaper to Purchase

Trulia has released its latest Rent vs. Buy Report, revealing whether buying a home is more affordable than renting in America's 100 largest metropolitan areas.  Looking at homes for sale and for rent on Trulia between June 1 and August 31, 2013, this study compares the average cost of renting and owning for all homes on the market in a metro area, factoring in all cost components including transaction costs, taxes, and opportunity costs.

In the last year, the rate for a 30-year fixed-rate loan rose from 3.75% to more than 4.50%, raising the cost of buying home relative to renting.  Homeownership is now 35% cheaper than renting nationally, down from being 45% cheaper one year ago.

"While it's hard to believe after the recent spike in rates, it's still more than one-third cheaper to buy a home than to rent," said Jed Kolko, Trulia's chief economist.  "Recent 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."

Source: NAMP Daily 

Compliments of Suzanne Smith

HNB Mortgage