Is it cheaper to buy or rent? [Video]
Posted on Monday, April 13, 2015 at 7:59:09 AM
With low residential financing rates, a strong economy and growing household income, would you say it is cheaper to buy a home today than to rent?
The answer is yes, at least according to a recent report from RealtyTrac. When crunching the numbers, the real estate data firm found that house payments were more cost-effective than fair market rents in 76 percent of housing markets across the U.S.
"From a pure affordability standpoint, renters who have saved enough to make a 10 percent down payment are better off buying in the majority of markets across the country," added Daren Blomquist, vice president at RealtyTrac. "But factors other than affordability are keeping many renters from becoming buyers, a reality that means real estate investors buying residential properties as rentals still have the opportunity to make strong returns in many markets."
Zillow looked at a few of the reasons why people choose renting or buying in a recent survey. For the renters among us, key reasons to skirt homeownership include the associated taxes, maintenance and fees, in addition to a lack of savings.
Another big reason to choose renting over buying is a desire to move again. Homeownership is most affordable if you plan to stay in one place for a long while, and Zillow found that 14 percent of the renters polled don't feel like staying put long enough.