Check out the latest results from Trulia's Rent vs. Buy Report. Homeownership remains cheaper than renting!
With a benchmark of-- a traditional, 20% down, 30-year fixed rate mortgage, rating 100 of the largest metro areas in the United States. The range is anywhere from 17.4% less expensive in Honolulu, HI, up to 53.2% less expensive in Miami and West Palm Beach, FL, with an overall average of 37.7% nationwide.
Key findings in the report:
• Mortgage interest rates have remained low and even though home values have appreciated around the country, the lower interest rates have helped to absorb the market appreciation.
• At this time last year, it was 37.2% cheaper. A .5% improvement which affirms buying a home vs renting continues to be the better decision.
• What is the tipping point of how high interest rates need to be in relation to home prices where it would actually make more sense to rent vs buy? Interest rates would have to increase to 9.1%, or 145% higher from today's average rate of 3.7%. The median home value for the U.S. would be $467,772, which is 67% higher than today's median value of $280,103.
Other key points to make, that the report doesn't reflect, are the other advantages of owning a home vs renting.
• Tax benefits. Deduct your mortgage interest and property taxes. Some closing costs in your first year of ownership are deductible too.
• Homeownership builds wealth over time. You benefit from the market appreciation, which builds equity, not your landlord.
• Pride in homeownership. The place is yours!
So, its great to hear about national averages and other cities results, but what about cities in Colorado? Denver and Colorado Springs definitely made the list. I'm not surprised that they didn't come in the top 10 (50.6%-53.2%) nor near the bottom (17.4%-29.4%). Comparatively, Denver and Colorado Springs came in very strong. It's definitely better to own than rent!
• The cost of buying vs renting factor for Denver is at 44.6%.
• The cost of buying vs renting factor for Colorado Springs is at 37.0%.
That said, there are many variables going into buying a home, please contact us, we would be happy to sit down and discuss what your goals are and how we can help you make the best homeownership decisions. We are here to help!
Deb Goetz, Realtor®, CRS, Broker/Owner