Homeownership 44% Cheaper than Renting | Las Vegas Real Estate

Mar 29, 2013, Posted by: Summer Bowen

Despite home prices rising 7 percent in the last year, buying verses renting is 44 percent cheaper according to Trulia. ?In all of America?s 100 largest metros, homeownership is cheaper than renting.

Falling mortgage rates have kept buying almost as affordable, relative to renting, as it was last year. ?Freddie Mac has reported the 30-year fixed rate dropped from 3.9% to 3.5% between February 2012 and February 2013.

Trulia calculates the following to determine the costs between renting and buying:

• the average rent and for-sale prices for an identical set of properties
• initial total monthly costs of owning and renting, including maintenance, insurance, and taxes.
• future total monthly costs of owning and renting, taking into account price and rent appreciation as well as inflation
• factor in one-time costs and proceeds, like closing costs, downpayments, sales proceeds, and security deposits.
• net present value to account for opportunity cost of money.

Trulia also assumes people will obtain a 3.5% mortgage rate, reside in the 25% tax bracket, itemize their federal tax deductions, and will stay in their home for seven years.

Ultimately, three factors have a real impact on the rent-versus-buy math: mortgage rates, tax deductions, and how long you stay in your home. Change any of these factors and the results could vary.

So if you are looking to buy, give Marshall Stearns Real Estate a call to help you find a home before rates change.

Source: http://www.marshallstearns.com/rentals/homeownership-44-cheaper-than-renting/

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