Buy a home or Rent a home, Which is cheaper in Madison wi?

s it cheaper to Rent or own a home and the Madison, Wi, area?  

A great question that we often hear.  RealEstateGuy team felt it worth consideration and a blog post.  

This calculation does NOT consider the Tax implications of home ownership, and the appreciation aspects, both of which have traditionally made home ownership a no brainer.   This exercise hangs on the NOW aspects, dollar in the pocket.  

This exercise does take in the face that rental prices are rising, and interest rates are historically low.  

I found an actual home listed for rent on Craigslist.   Rent does not seem unrepresentative of the West Madison area/size at $2000 a month.   see the CL listing below. 

Now the home had been for sale on the market for 6 months at $350k,  Let's calculate a mortgage with a 20% down, That would be $280,000 and the interest rate 4.25 on a 30 year.  

payment $1377, plus taxes and insurance $600.  that is $1977.    Cheaper?  yes!  significant? No!

However, let's look at the home,  The assessment is $311k. The home did not sell because it was high.  I'd suggest fair market more around $300,000.  This would be the price that a similar home  (not necessarily this one) would actually sell for.  

Repeat the above calculation on a $240,000 loan = $1180, plus 600 taxes & Insurance = $1780.   

This is a great example, though not statistical proof, that home ownership is indeed a way to go.  

Read this great article.

Is now a good time to buy a home?  

Look for homes for sale