On Monday, Trulia, the giant online real estate site released their latest Rent vs. Buy index which found that it’s more affordable to buy than to rent in 72% of America’s 50 largest cities. They found that renting is only less expensive in 4 of the cities; New York, San Francisco, Seattle and Kansas City.
Of course, little New Hampshire wasn’t even on their radar so I decided to do a little analysis of my own using Trulia’s methodology and MLS statistics. Trulia’s formula was to divide the median sale price of a given area by the median rental price multiplied by 12 to come up with “Price to Rent Ratio”.
A ratio 0f 1 to 15 means that it is much less expensive to buy than to rent.
A ratio of 16 to 20 means the total costs of homeownership are greater than the cost of renting but it might still make financial sense to buy depending upon the situation.
A ratio above 21 means that it is more affordable to rent than to buy.
I decided to look at how the numbers play out in the two counties in Southern New Hampshire that I deal with most, Rockingham County and Hillsborough County and, being the type of person who likes to compare apples to apples, I compared buying vs. renting a 3 bedroom house; a 2 bedroom house and a 2 bedroom condo.
According to this methodology it is much less expensive to own a home than to rent in both Rockingham and Hillsborough County. The numbers are:
Rockingham County
3 Bedroom House-12
2 Bedroom House-13
2 Bedroom Condo-10
Hillsborough County
3 Bedroom House-11
2 Bedroom House- 9
2 Bedroom Condo-10
So, what are you waiting for????
Comments(2)