Latest News: 42% cheaper to buy in Seattle than to rent. Average savings $715 per month.

The real estate site Trulia just published their detailed annual study regarding the dollar relationship between renting and buying a home in these United States… and, the numbers are startling! For example, in Detroit there’s a 70% advantage to buying versus renting.

Buying cheaper in every large metro area

Buying is cheaper than renting by several hundred dollars a month in every large metro. Yes, every large city. While the percent difference in buying versus renting may be smaller in San Francisco (-28%) than in almost all other metros, the annual dollar savings is big ($899) because the rents and home prices there are so high – even a smaller percentage difference means a big dollar difference.

Basic assumptions

To calculate whether renting or buying costs less, Trulia assumed that people:
  1. Can get a low mortgage rate of 3.5%,
  2. Itemize their federal tax deductions,
  3. Are in the 25% tax bracket, and,
  4. Plan to stay in their home for seven years.
Not all of these criteria fit you? Not to worry… Trulia also shows you how changing these assumptions can affect your rent-versus-buy math.
Of note is that this data does not include appreciation values, or how much your home will be worth if you sell it in 7 years.
You don’t think property values in Seattle and Bellevue and Issaquah and Newcastle, etc. are not going to increase? And, by the way, anyone out there really think that rents won’t continue to rise?!

Click for a great interactive map.

NOTE:

The cost of homeownership assumes the home is sold after 7 years, and includes the closing costs, maintenance, insurance, property taxes and other costs. Cost of renting includes security deposit and renters’ insurance. Monthly cost is based on net present value of costs over 7 years, and on the average across all properties listed in the metro area, including those for sale and those for rent, in summer 2012.

Oh, and, by the way, anyone out there really think that rents won’t continue to rise?!

Leave a Reply

Your email address will not be published.