Real Estate Marketing & Beyond
According to latest stats from Trulia’s Winter 2012 “Rent vs. Buy Index”, buying a home is now actually cheaper than renting out a place in a staggering 98 out of the 100 largest metropolitan areas in the US. But can this claim really be true, and if so, how on earth?
The following infographic from Homeinsurance.org attempts to explain the various factors that led to real estate in the US being turned on its head – it’s incredible to think that buying a place could be more affordable than renting, but once we understand what’s happened, things suddenly become much clearer…
Compiled by Homeinsurance Blog
So we can see, Trulia’s claim that buying vs. renting is cheaper is indeed true – for some of us. As always, it’s the personal factors that matter most of all when it comes to deciding if now is the right time for YOU to buy a home.
It is interesting to see, that the same thing is happening in Canada. We have one of the highest debt-to-income ratio for our households (as explained in The Right Time For Canada's Debt Consolidation), yet we still believe that investing into the real estate is a good idea.
This is true now and has pretty much always been true. Usually landlords have ownership costs that drive rent up higher because of the need for a profit margin. A 3bed/2bath in Atlanta, GA can be bought for less than $40,000 in many areas. The mortgage payment would be about $550 per month with taxes and insurance. That same house can then be rented for about $850, even in the outlying areas. So rent payments virtually always tend to be higher than a mortgage payment. It's usually lifestyle that determines whether someone rents or buys. Renters are free to move as they wish. Owners are planning to settle down.