Buying vs Renting: Recent Study Shows It Is Cheaper to Buy a Home

When it's cheaper to buy than to own, it means that first-time homebuyers are in direct competition with investors. Because cheaper to buy means investors can charge more in rent than it costs to main the property with an 80% mortgage, so they will be going head-to-head with buyers. That kind of market for investors equals positive cash flow.

Robert - Doesn't surprise me in the least that it is cheaper to buy than rent in many areas.  With these interest rates, makes sense to me.  The thing folks should realize when buying is if something goes wrong, it's money out of their pockets to fix.  Reserves are crucial.

I'll always believe it's better to buy than rent. You're right that with the housing bubble burst and low interest rates it is cheaper in most areas to buy than rent. Beyond that, I've always had a problem with just "throwing away money" to rent when you could be building equity in owning a home.

Gretchen

Robert:

I haven't actually check my community on Trulia, but I know that the rental market is very tight and prices are rising rapidly. 

Robert -- Rentals are definitely going up as demand increases. I have converted a few from renters to buyers after we did a cost analysis.  On the average, they're paying $18K a year for rental plus utilites with nothing to show for it.  That's a good chunk of change. It really pays for the tenant to research this with pricing the way it is and still very low interest rates.... and let's not forget that mortgage interest and property tax deduction.

This is pretty basic but it is also pretty amazing how many still don't get it! Great post! Happy Easter!

Robert, great post and congratulation on it being featured. It is also a good agent's job to help buyers or sellers compile a pro vs con list when it comes to buy or sell Real Estate. Have a great Easter weekend.

Hi Robert..... buying is much cheaper than renting as long as one qualifies..... the rental market is our of sight right now....

Hi Robert,

As rents continue to rise, the rent vs. buy comparison weighs heavily on the side of buying. This has already and will continue to strengthen the sales market as more people realize they can save substantial money by owning.

Happy Easter!

Robert - I think I need to go take a look at the report.  It doesn't surprise me though I'm not sure how they see it here in the OC.

Not everywhere in the country, but the area is growing rapidly.

The "secret" is to SELL to INVESTORS because if you have to ARGUE homeownership, they do not want to buy....renters want to stay LIQUID for jobs, health and family issues and do not want to get "caught" not being able to sell when and if they need to move.

Its definitely cheaper to buy here than to rent...but buyers are STILL on the fence.  I was hoping that this would act like a tonic on the resale market, but it hasn't materialized.  THe issue seems to be that buyers don't want to lift so much as a pinky finger once the move in.  No house is perfect.  The only thing that works for people that picky is new construction - which is out of reach for most of them. 

Robert,

This is a great analysis. 

Many are wondering which is better.

Thanks for the post!

Great post with so much information I thank you for sharing and wish you all the best