Are you looking for answers about whether you should buy a home or rent in today’s market? Trulia has just released its Rent versus Buy Report for Summer 2013 which reveals whether buying a home is more affordable than considering renting a home. The report is based on the 100 largest metropolitan areas in America and the data comes from those consumers that were looking for homes to buy or rent on Trulia during the period of June 1 thru August 31, 2013.
The study compares the average cost of renting and owning for all the homes that are on the market in a metropolitan area. The study factors in all cost components that include transaction costs, taxes, and what they consider opportunity costs. One key factor is that in the last year the rate for a 30-year fixed-rate mortgage has risen from 3.75% to 4.80%, which has raised the cost of buying a home as compared to renting one.
The result was that homeownership is still 35% cheaper than renting on a national basis. One year ago the number was 45%. “While it’s hard to believe after the recent spikes in rates, it’s still more than one-third cheaper to buy a home than to rent,” said Jed Kolko, Trulia’s chief economist. Source: NAMP Daily
Steve Lester is a REALTOR living in Allen, Texas.