Debating the benefits of renting vs. buying can cover many issues, but more often than not, the final decision weighs heavily on affordability. In recent years, the housing market has definitely been a buyer’s market with foreclosures and an over-saturated home market. With the economy making a slow recovery, you might fear this trend has come to an end and the cost of renting might be more affordable than buying. According to Trulia’s latest Rent vs. Buying Index study, which analyzed the 50 largest cities in the U.S., it is “more affordable to buy than to lease a 2-bedroom home in 72% of the cities.”
The study also revealed an interesting change in the demographic of the traditional renter vs. the traditional buyer. The tables have turned when it comes to who is renting and who is buying. “Lifelong renters are seizing the opportunity to become homeowners, while affordability is high. At the same time, a growing number of long-time homeowners are finding themselves tenants – some by choice, some by necessity,” observed Tara-Nicholle Nelson, consumer educator for Trulia.
While the trend is that buying is more affordable than renting in most major cities, there are exceptions to every rule. For example, the following cities registered affordability scores which indicate that renting is much more affordable than buying:
New York, NY
Seattle, WA
San Francisco, CA
Kansas City, MO
If you or your clients are in the process of making the decision whether to purchase a home or to lease, the following Rent vs. Buy Calculator can help you determine what each option will cost in your situation. If you have any other questions about purchasing a home, visit our website.