Keep up with essential planning news and commentary, delivered to your inbox every Monday and Thursday.
Should You Rent or Should You Buy? Trulia Maps the Question
Ana Swanson shares the findings of a recent study finding that around most of the country, buying will still cost less over the long term than renting. Swanson writes: "If you buy a home with a traditional 20 percent down payment and a 30-year mortgage, on average it will cost about one-third less than renting a similar home around the U.S., according to a new report from Trulia, a real estate site."
According to Swanson's explanation of the study, there are two primary reasons to explain the value of buying compared to renting. "One is cheaper mortgage rates, which have decreased from 4.5 percent in 2014 to 3.87 percent as of April 15. Another is that the growth in home prices over the last year — 3.9 percent — wasn’t much larger than the 3.7 percent gain in rents." According to the report, many of the best places to gain value by buying instead of renting are located in the South, including Sarasota, Florida; Fort Myers, Florida; Baton Rouge, Louisiana; New Orleans; and Miami.
A post on the Trulia website by Ralph McLaughlin approaches the report from the other angle—why renting is the better value in places like Honolulu or New York City. The post provides the details on the findings of the report, but the headline pins culpability for the lack of value in buying on homeowners associations. Well into the article, McLaughlin backs up the point: "When we factor in the median HOA fee, the buying advantage almost disappears in some markets. In the New York metro area, buying a home becomes just 4% cheaper than renting, compared with 27% cheaper without the fee. And in the Honolulu metro, renting actually enjoys a 1% advantage when HOA fees are considered."
An interactive map helps break down the findings of the report to the local level.