Buying A Home Cheaper In Nearly Three Quarters Of Big U.S. Citis: Trulia

Thanks to the foreclosure crisis, buying a two-bedroom home is cheaper than renting in most big cities.

In its quarterly Rent vs. Buy Index, real estate data firm Trulia found that buying a property -- including the mortgage principal, interest, taxes and insurance -- was cheaper than renting in 72 percent of cities around the country. The firm compared a years' rent for a 2-bedroom apartment, condo or townhouse with cost of buying a similar property in 50 big cities around the country.

Miami, and Las Vegas, which both posted soaring foreclosure rates last year according to data from RealtyTrac, topped the index as the cities in which is cheapest to buy.

"Since the start of the Great Recession, many former homeowners have flooded the rental market," Pete Flint, Trulia chief executive said in a statement. "Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets."

Renting is cheaper in only four of the cities Trulia looked at: Kansas City, New York, San Francisco and Seattle.

Where else is it cheaper to rent than buy? Check out Trulia's map below. Click on the image for a full interactive graph.

Where else is it cheaper to rent than buy? Check out Trulia's Index below. Click on the image and scroll down the Trulia website for a full interactive graph.

Comments

[janejoad]

12:28 AM on 02/04/2011

There you have it. "THANKS to the mortgage crisis, houses are cheaper to buy". What that did for us, was put out us on the street (actually we've been staying in our daughter' guest room for the last two months), unable to sell our house for a FAIR price and that, coupled with the job loss that came with the bank robbbery and the housing bubble, sealed our fate. Yes, THANKS to all that, some will make out and some were shut out. How proud we must be of a country whose citizens can hardly wait for a distaster so they can make a buck.

What a stupid thing to print. Why don't you just lead us all to the next SOYLENT GREEN station for processing out and be done with it. It's not like we're REAL PEOPLE or anything. Just a taxpayer number. Who needs beef when there are so many people anyway?

We do feel good today about making a decision to move to another city and get something going. Being in our 50's, we decided to take a chance on Palm Springs ( we currently live in the Foothills about an hour away. Got some cheap rent in a famous Vintage Mobile home park.
Quirky little coaches, some even with a RR in the driveway.

The only thing that will save us, is our ability to reinvent ourselves. But even in these times, it should NOT be at the expense of our fellow citizens.

[Codeine Priest]

05:35 AM on 02/04/2011

"How proud we must be of a country whose citizens can hardly wait for a distaster so they can make a buck"

It's the New American Dream, Jane. And in the interest of surviving (and perhaps, even thriving) in this shrinking, dog-eat-dog economy, I too (also in my 50s) have reinvented myself and adapted to the harsh new realities of the no-safety-net, no health insuranve, no pension, stuck-in-the-80s-wages-with-2010-living-expenses existence that is now the life of so many (private-sector)working Americans these days (I include myself among them). That said, can you blame me for taking advantage of the housing crash and, hearing one of the greatest opportunities for "the little guy"(or gal) of this century *POUNDING* on the door: buying homes for $.05 on the dollar and then renting them out? Afterall, if all you have is $10k, and the choice
is between putting it in the bank and collecting,...what is it now...?.....01% interest?(LOL), higher-yield but risky investments, or buying a home for $10k in an area where that home will fetch you $300-400 a month as a rental, what would YOU do?

[jgourlay]

04:59 PM on 01/25/2011

Note that the rent/buy equation tilts to rent in direct proportion to the degree of marxist property taxation and boneheaded regulation in the area.

This natural: rent has to cover all the maintenance costs that ownership does PLUS a premium to make it worth the landlords while to come unplug your toilet at 2 am.

[Jeffin90019]

04:39 PM on 01/25/2011

Mortgages? No thanks. When I bought my $255,000 home in 1997, I noticed a line item on the mountain of papers I signed to get the loan: The full price plus interest over the life of the loan was more than $700,000. There's no way a piddly interest deduction comes out to half a million dollars over the life of the loan. I feel better renting and investing through a 401k and IRA. I'm taking care of my retirement without getting reamed on interest, not mention home maintenance.

[LonnieJoe]

10:10 AM on 01/25/2011

As a person who would never sell my principal home, for 2 reasons one finacial the other emotional. Financially I have a $500.00 per month mortgage, you cannot rent a 1000 sq ft house on 10 acres, with a 2 stall barn and a shop for that. However when I bought the place it was a piece of vacant land uphill from a creek, with an abandonded horse arena. I was looking for a place that I could make the mortgage and still live on unemployment/ minimum wage if the economy went south, I'm a pipefitter the economy goes up it goes down. Homeownership isn't an investment like my IRA, it's deciding where you want to build your life and making it work. At the hieght of the bubble I'd occasionally look at zillow and see what my place was worth, but thats not real all this we lost 1000's of dollars in home value is for the most part bull unless you want to sell today, because it's a home not an investment

[MetrointheWoods]

09:39 AM on 01/25/2011

Setting aside my graduate degrees in real estate and urban planning, I just want to make sure my facts are indeed correct. A website that makes money by advertising houses to the homebuying public states that owning a home is cheaper than renting? Instead of presenting facts, analyses based on actual Federal lending requirements, affordability, and drawing educated conclusions, conclusions and data is presented in the form of oddly shaped pyramid graphs and bubbles....is this correct?

Maybe Trulia can tell everybody how banks are just giving away money and houses have NEVER lost value....that sound about right for 2004?

If you've ever had to:
Buy flood insurance
Remove snow
Change an electrical socket
Cut grass
Replace a roof
Or paint a room....you've lost money on home ownership! Truth is, no amount of equity (real or alleged) can ever compensate you for the time, energy, or liability of home ownership. Believing the analysis of a home sales website is a lot like receiving medical advice from a insurance agent.

[Jeffin90019]

04:40 PM on 01/25/2011

I am totally with you on this. Home ownership is largely a sucker's bet.

[Sundialsvc4]

09:35 AM on 01/25/2011

Renting has one very important difference: you can walk away from the relationship at any time.

[FOXYROSE]

08:50 AM on 01/25/2011

Once you own, it is really difficult to go back to renting. Yes, it's expensive to own, but I can do what I want with my own property.

[Jeffin90019]

04:41 PM on 01/25/2011

I happily went back to renting after owning first a house and then a condo. I don't want the debt or the maintenance.

[MerrieWay]

04:35 AM on 01/25/2011

Sad scenario...when the bank frauds have made owning a home a lost dream for many, who would have not jumped into the nightmare scenario had it not been for the manipulation.

[ItsBarranti]

04:19 AM on 01/25/2011

"In its quarterly Rent vs. Buy Index, real estate data firm Trulia found that buying a property -- including the mortgage principal, interest, taxes and insurance"

Pay Attention. Pay close attention. Principal, Interest, Taxes and Insurance are NOT the only expenses involved in owning a house. Your Monthly Mortgage payments may be lower than rent, but that's a given.

For your house, Utilities cost more, You are responsible for paying for repairs, landscaping, sewage and trash removal, and a host of other costs that are generally included in your rent, so it's not a fair comparison to just compare rent to "mortgage principal, interest, taxes and insurance".

What it is is a scam. The Home Ownership = The American Dream is a popular narrative, but in reality it's a scam is designed to keep Americans slaves to debt and less likely to leave their job or otherwise question the status quo.

[cyoohoos]

04:40 AM on 01/25/2011

Thank you. I was going to post something similar, but yours is better. Owning a home has way more costs than just the mortgage.

[SAZ44]

06:52 AM on 01/25/2011

I was thinking the same thing. When I do buy again, it is going to be a small easy to maintain cheap house. I like to renovate, can't do that renting.

[whitemale08]

03:48 AM on 01/25/2011

Why would anyone trust the mortgage industry?

It's beyond me to see that in the midst of the biggest mortgage-backed securities scandal, where Big Failed Banks, such as BoA and JP Morgan can foreclose with no tittle, there are still folks willing to be duped all over again.

[FDMNews]

03:33 AM on 01/25/2011

Hum, I see tons of ads for apartments that are totally overpriced for what is being offered especially given where our economy is and how many people are losing their homes and jobs. I see rents rising like cray in fact.

I think part of the problem is that no one keeps stats on renters too much, everyone talks about how many homeowners have lost their home, how many renters have been forced to move? Its been ok for a long time to ignore the affordable rental issue.

I think rents are way above where the market should be given the current economic reality, because owners may have extended themselves and have large loans to pay. Its the only explanation when rents are not going up not down.

I've been looking for affordable housing for over a year so I have been able to see some interesting trends.

The costs associated with renting apartments is truly amazing. Remember the days you'd go out to meet a person to look at a decent place, fill out an application?

Now, one has to pay to apply, pay for the credit reports, and, in some cases, you've got landlords dictating all kinds of lifestyle choices that you can't do this and you can't do that....

I have been surprised how people living in the U.S. are ignored if they don't have a house.

[cyoohoos]

04:41 AM on 01/25/2011

I rent and the 'costs' associated with renting are generally less than 100 dollars. Unlike the THOUSANDS of dollars in fees associated with buying/selling a home. It is not a fair comparison.

[phnxrth]

07:37 AM on 01/25/2011

Thanks for including some points the article omits. I think they're measuring lowest common denominators and saying they've got something.

I live in an area the article designates as extremely cheap real estate. That's a small part of the picture. Cheap isn't good.

What I see is a revolving door of homeowners who don't really know how to be homeowners, who contribute nothing to the community and renters who are even worse. None of them last as long as the established folks, they are a drain on resources.

That is the longterm trend. (I'm sure there's the occasional exception, that goes without saying.)

[Robert SF]

02:53 AM on 01/25/2011

Yes, and it will be even cheaper to buy next year.

[CaliforniaWiseGuy]

02:37 AM on 01/25/2011

I consider this article very misleading. Here's a link to a New York Times interactive graphic that calculates "whether it is cheaper to rent or buy." The picture it paints is not nearly as rosy regarding buying a home, at least not as far as the area in California where I am:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?hp

[ta8ersalid]

12:10 AM on 01/25/2011

Renting a house is comparable to leasing a vehicle.

You never own it, always have a payment and your making someone else rich.

This is a short time in the blip of home ownership.

Since, I have no plans to mave anytime in the next 10+ years, I dont care what the price of my house is, only how many more payments until I own it with no more payment...EVER!

[jmichaelmunger]

01:52 AM on 01/25/2011

You said it; you have no plans to move in the next 10 years.

Not all of us have that luxury.

[mxytsplyk]

02:41 AM on 01/25/2011

If youʻre going to live in the house until you die, I agree that what itʻs worth doesnʻt really factor, as long as you can afford the property taxes, if any. But neighborhoods ebb & flow and what was once a desirable part of town may not be, after a few years.

[traceymarie]

05:37 PM on 01/25/2011

be careful where you buy, not all or even most neighborhoods go down.

[ta8ersalid]

12:01 AM on 01/25/2011

No wonder the banks are holding 1 million foreclosures.