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Buying More Affordable Than Rent In 100 Largest Metros

March 5th, 2014 | Written by | Leave A Comment

Though  mortgage rates rose in 2013, they are still well below historical norms. And,  according to a new report from Trulia, historically low rates mean buying a home  is still cheaper than renting in the 100 largest housing markets across the  country. Even with last year’s price increases, mortgage rates would have to hit  10.6 percent before renting a home was more affordable than buying one. Jed  Kolko, Trulia’s chief economist, said today’s mortgage rates would be the envy  of buyers from the 1980s, ’90s, and 2000s. But Kolko also warns buyers that, in  many markets, the rent-vs-buy decision depends on what happens to prices after  you buy. Sharp price appreciation could make homeownership essentially free,  Kolko said. But, on the other hand, price decreases could mean renting, in  retrospect, would’ve been the better deal. Still, when Trulia calculated the  cost of renting vs. buying assuming that prices will rise or fall as they did  during each market’s worst seven-year period, buying remained more affordable  than rent in all but 37 of 100 metro areas
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