Is Renting Really Cheaper Than Buying a Home?admin / 0 Comments /
The number of U.S. homeowners is at a 50 year low, many more households have decided to rent a home instead of purchase their own home. Although the reasons for this decision vary, many might assume renting is a more cost effective choice than making the commitment to purchase a home.
However, in a study performed by Trulia which compared the monthly expenses associated with renting and owning a home, it found that renting can be 37.7 percent more expensive than owning a home. The study included monthly expenses such as mortgage payments, taxes, home owners insurance and the cost of upkeep and repairs. The major factor influencing the affordability of buying a home is, of course, the low mortgage rates that are still available to buyers.
Even the possibility of a Federal rate increase won’t have much effect on the affordability of homes. According to the article written by Kendall Baer, published by DSNews, “…Rates would need to increase drastically in order to push the rent vs. buy decision toward renting.” In fact, in many areas of the U.S., home prices are increasing and it is that rise in home prices that will truly impact housing affordability.
Nevertheless, a number U.S. real estate markets have reported rental expenses that fall significantly below the monthly expenses of owning a home. To find out in which areas of the U.S. it makes more sense to buy a home and in which areas, renting may be a more cost effective option, read the entire article.