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Do you know why buying a home is cheaper than renting?

Buying costs less than renting in all 100 large U.S. metros, according to the Rent vs. Buy Report from Trulia (TRLA).

Rising mortgage rates and home prices have narrowed the gap between renting and buying, though rates have recently dropped and price gains are slowing.

Low mortgage rates have kept homeownership from becoming more expensive than renting. In some markets, like San Francisco and Seattle, rents have risen sharply; rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison.

Trulia says that at a 30-year fixed rate of 4.5%, buying is 38% cheaper than renting nationally, versus being 44% cheaper at the start of 2013.

(While renting is more expensive, only half of potential homebuyers have credit that would get such a rate, and many first-time homebuyers are struggling to form households or get out from under student debt.)

The range of difference, as one expects, varies from market to market – buying is only 5% cheaper than renting in...

 

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Trey Garrison
Anywhere in the U.S., buying is cheaper