Rent vs Own, this is one of the biggest questions first time buyers or folks looking to get back into home ownership ask themselves. There a many calculators online you can go to that brake down costs and give you better idea. You need to take some assumptions on cost of rent increase and appreciation of home. Rents average around 2% increase year and appreciation before the last few years had an average that was easier to predict. I would stay conservative and keep it at 2% when doing one of these calculations. Trulia.com has one of the better calculators and shows the top 10 cities for both renting and buying. This is where it gets tricky; you need to look at your neighborhood. Trulia says it's better to rent in the San Francisco then buy. You cannot assume since it says San Francisco is better for renting then it's the same for Petaluma. I would argue that there are areas in the city that are better to buy then rent, like the Sunset District. That same principle works in Petaluma, so you also need to look at neighborhood you are looking at. You need to find the neighborhood and rents for that some house to be accurate.
Below I have done this for the Victoria neighborhood in Petaluma, which I live in. Rents are $2,200 to $2,600 depending on number of bedrooms, shared driveway or not, view, how close to open space and few other factors. I took actual examples, 276 Cambridge Lane in Petaluma, is listed for $539,000, it's 3 bedroom, 2.5 bath, good condition, views of Helen Putnam, which is a open space park and the rent for similar home is $2,30
For the purchase I did this with 20% down, at full list price, 4.25% fixe rate for 30 years, and 2% appreciation and only went out 10 years for the comparison. I thought this was very conservative.
The media wants you to think it's a great time to rent not buy. But I just want you to use your own mind and research to determine which is right for you. Figure out which neighborhoods you would like to live in. Then do your research for that neighborhood and not just the whole town. You will need to determine all the other outside factors that could affect your neighborhood and purchasing power, but this example from my neighborhood in Petaluma shows it would be better to purchase then rent in it.
Below is one more example Michael Regan, from The Reagan Team was kind enough to let me use.
*Trulia rent vs own calculator was used, but unable to get screen shot to upload.
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