Owning Is Cheaper Than Renting

Dated: 08/01/2018

Views: 249

The results of the latestRent vs. Buy ReportfromTrulia show that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage, in 98 of the 100 largest metro areas in the United States.

In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in any of the metropolitan areas.

It’s no surprise, however, that those two metros are San Jose and San Francisco, CA, where median home prices have jumped to over $1 million dollars this year. Home values in San Jose have risen 29% in the last year, while rents have remained relatively unchanged.

For the 98 metros where homeownership wins out, 97 of them show a double-digit advantage when buying. The range is an average of 2.0% less expensive in Honolulu (HI), all the way up to 48.9% in Detroit (MI), and 26.3% nationwide!


In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here.


In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

Cheryl Young, Trulia’s Chief Economist, had this to say,

“One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

Bottom Line

Homeownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.



Blog author image

Jeffrey Gamble

Jeff has been a full time real estate agent in Southern Ocean County since 1973, so he knows his way around the Long beach Island territory as well as around the real estate business in general. Jeff....

Latest Blog Posts

Get An Early Start On Holiday Shopping

Want to get an early start on your Holiday Shopping?Head on out to the:Stafford PTOs2019 Fall Craft & Vendor FairSaturday, November 16th10am - 3pmOcean Acres School Gymnasium489 Nautilus Dr. - 

Read More

Long Beach Island Real Estate Weekly Sales Update LBI Real Estate Weekly Sales 113201911102019

Long Beach Island Real Estate Weekly Sales Update LBI Real Estate Weekly Sales 11/3/2019-11/10/2019Long Beach Island Real EstateLBI Real Estate Weekly Sales Update 11/3/2019-11/10/2019: There

Read More

Why You Should Replace Your Roof Before Selling Your Home

Are you thinking about putting your home on the market for sale? It doesn't matter if you've been living there for 50 years or five, you want to do everything you can to

Read More

National Award Won By Barnegat VFW

Congratulations to our Barnegat VFW Post 10092 are in order for being awarded the National Outstanding Community Service Award by the VFW National Headquarters.  Barnegat Post's outstanding

Read More