The Cleveland subway was number one in terms of buying and renting
According to realtor.com, buying or renting is cheaper in some cities. A new analysis found that low mortgage rates have made buying rather than renting more affordable in a growing number of metros. Realtor.com recently analyzed the numbers. While mortgage rates remain low until 2021, “buying a home was the same as or cheaper than renting in 15 of the 50 largest metropolises in the United States,” the report said. Nine other stores were within 5% of the turnover in favor of the purchase. ”
Although rates have increased somewhat, they remain historically low. Expect these rates to improve affordability over the year. “Unsurprisingly, it makes more sense to buy when property is affordable and the median selling price is lower than the national median,” said realtor.com Chief Economist Danielle Hale.
The monthly cost of buying a house at average price on the 50 largest metros was $ 1,988, compared to the average monthly rent of $ 1,727. Cities where it is cheaper to buy include Cleveland, Chicago, Pittsburgh, Riverside, California, and Miami. Conversely, San Jose, Austin, Sacramento, Seattle, and San Francisco are high on the list of cities where it’s better to rent.
Listen to Sarah Pierce, Head of Operations at Better Home Ownership company Better.com, which currently funds $ 4 billion monthly in home loans. “While the 30-year fixed mortgage rate rose to 3.26% last week, its highest level since July last year, homeowners are expected to take the opportunity to save while they can. The choice between renting and Buying a home is never easy, but today’s low interest rates have made home ownership more accessible than ever. ”
Pierce makes a point that some buyers should be aware of. “Buying is a smart choice for many people, but it depends on the homeowner’s individual financial situation, location and planned length of stay. A buyer typically needs to stay in the house for at least three years to cover the costs. ”
The low interest rates over the past six months have had an impact on the monthly cost of buying a home at average price. That monthly cost increased only 0.2% year over year to $ 1,988. Compare that to rental rates, which rose 2.4% to $ 1,727, according to realtor.com. Note that this does not take into account the ongoing benefits of home ownership.
The applied method realtor.com: ” Purchase and rental costs reflect the current costs and do not take into account the holding period, price and rent increases or inflation. The acquisition cost is based on the purchase with a 30 year fixed rate mortgage and full repayment of 80% (20% down payment). They include taxes and insurance and are calculated based on the price data for residential realtor.com® subway level and mortgage interest data for January 2021. “All rental units that realtor.com looked at were” two to four bedrooms, to be comparable to the typical home purchase ”.
Let’s take a deeper dive to see where it’s cheaper to buy than rent right now. The Cleveland-Elyria subway is number one when buying a home with an average list price of $ 198,000, which is cheaper than renting. Realtor.com has a monthly mortgage payment of $ 967 there compared to a rent of $ 1,195.
Despite the hot Miami real estate market, it seems cheaper to buy on the Miami-Fort Lauderdale-West Palm Beach subway with an average list price of $ 400,000 and a monthly mortgage of $ 2,092. Renting there costs $ 2,350 per month. The influx of snowbirds renting during the winter months can have an impact on rental rates in South Florida.
“With the purchase at today’s prices, you can secure your monthly housing benefit payment, which remains the same from month to month. When you rent, expect rent increases every year, ”notes Hale.
Once again, when it comes to buying or renting, both financial and lifestyle choices are important.