Buying is more affordable than renting in 98 out of the nation’s 100 largest metropolitan areas — even in New York, Los Angeles and Boston, according to real estate company Trulia‘s Rent vs. Buy Index. Oklahoma City was ranked #2 on the list with a price:rent ratio of 4.3.
This index is based on asking prices for rental units and homes for sale on the company’s website between December 1, 2011 and February 29, 2012.
As rents rise, homeownership is becoming even more affordable. This however, creates a dilemma for people who can’t afford to buy yet. Rising rents make it harder for people to save for a down payment, which is the biggest obstacle to buying a home that potential homeowners face.
Homeowners are choosing , or being forced, to rent rather than buy even though the latter is cheaper in key markets that Turlia reviewed. This increase in demand squeezes the nation’s rental supply, pushing monthly rents even higher.
The average national rent runs $712 per month, well above the average monthly mortgage cost of $647. Rents are expected to rise as much as 5% by early 2013, compared to 2.4% in January of this year.
Two markets where renting is still a better deal than buying is Honolulu, and San Francisco. Home ownership might even be a better choice in these markets, if the the individuals plan to stay in their home for at least 5 years and if they can benefit from the morgage interest deduction on their taxes.
For more information see article written by Justin Hilley “Buying is cheaper than renting in nearly 100 major U.S. markets’.