As the economy steadily improves, owning a home is once again proving to be a more affordable option than renting in Americas 100 largest metropolitan areas. There are three main components that that sway people to buy rather than rent. The first being favorable mortgage rates, next is tax deductions and the third being time horizon. Interestingly enough, owning a home is cheaper by a very wide margin. In Boston, for example, it was recently released in a past blog that the city ranked as #1 Nationwide for investors looking to purchase property in so-called 'College towns or cities'. This is essentially because here in Boston it makes much more logical sense to purchase property than to rent as the difference between the rent and mortgage rates for similar properties is 248.7%.
Percentages of course vary from location to location but studies have shown that buying a home in places such as Detroit is as much as 70% cheaper than renting whereas in San Francisco there is a 28% separation. As rent is so high in California, the monthly dollar savings can be as high as $899 per month. These aforementioned figures assume that the home is sold after seven years and includes closing costs, maintenance, insurance, property taxes and other necessary costs. Point being, if the above assumptions change the equation changes as well.
At this point in time, because of rising rental costs and incredibly low interest rates, buying a home is simply a much wiser choice. With the economy steadily improving there is the undeniable hope that home values will continue to be on the up as they have proven to be thus far throughout 2012.
More Information: Mercury News