It's an age-old question: is it better to rent or buy? The question has many facets and can be complex to answer depending on an individual's situation. But generalizations are sometimes useful to view market-wide trends.
I ran across a news story that reported that it is cheaper to buy than it is to rent in 39 of the 50 largest cities in the US. The report was issued by real estate site Trulia. Their rent vs. buy index compared the median list price with the median rent on two-bedroom apartments, condos and townhomes as of 4/1/11. "With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying," said Ken Shuman, Trulia's spokesperson, in a statement.
I also found a rent vs buy tool that the New York Times newspaper put together. The tool is below and you can click on it to get to the original article which allows you play with some of the tools and run different scenarios.
Keep in mind that this is a purely theoretical (and economic) tool which does not account for intangibles as pride in homeownership, stability, etc. I would also point out that it is almost always beneficial to purchase a home if you want to "settle down" in the order of many years (10+). The current housing slump aside, homes willl likely appreciate over the long term.
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