Trulia Summer 2011 Rent vs. Buy

Better to Rent or Buy?
Summer 2011

Homeownership Beats Renting in 74% of Major U.S. Cities
12%
74%
14%

Top 10 U.S. Cities Where Buying Beats Renting

Top 10 U.S. Cities Where Renting Beats Buying

Rebounds and Setbacks in Foreclosure Hotspots
It’s still more affordable to buy in Miami, but a mini-buying boom created by foreign investors and foreclosure freezes have caused its price-to-rent ratio to jump by 112% from 6 in January to 13 in July.

Recent job gains in the auto industry have not countered Detroit’s falling home prices. The city’s price-to-rent ratio has dipped 39% from 12 in January to 7 in July.

Las Vegas, on the other hand, continues to be the best place to buy instead of rent for the past six months with its price-to-rent ratio remaining consistently at 6.

Extra! Extra!
INTERACTIVE RENT VS. BUY VISUALCheck out Trulia’s data visual to see how the rent vs. buy debate has changed throughout 2011 in America’s 50 largest cities. http://insights.truliablog.com/vis/rent-vs-buy-q3/
RENT VS. BUY CALCULATORCompare the costs of owning versus renting a home with Trulia’s rent vs. buy calculator to see which option may be a better fit for your financial needs. http://www.trulia.com/mortgage-calculators/06/rent-or-buy/

Methodology
Trulia calculated the Summer 2011 price-to-rent ratio for the 50 largest U.S. cities using the median list price compared with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of July 1, 2011.

Sample Price-to-Rent Ratio Calculation:
Median List Price: $140,201.37
Median Rent: $1,871.65
Price-to-rent ratio: $140,201.37 ÷ ($1,871.65 x 12) = 6

Interpretation Key:
Price-to-Rent Ratio of 1-15: Owning a home is much less expensive than renting in this city.
Price-to-Rent Ratio of 16-20: The total costs of homeownership in this city are greater than the costs of renting, but it might still make financial sense to buy depending on the situation.
Price-to-Rent Ratio of 21+: Renting in this city is much less expensive than owning a home.

Definitions:
Total costs of homeownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase and ongoing HOA dues and private mortgage insurance, where applicable. It also includes an offset for the tax advantages of homeownership, including mortgage interest, property tax and closing cost deductions.
Total costs of renting include rent and renter's insurance.

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Trulia Summer 2011 Rent vs. Buy

by Trulia on Aug 15, 2011

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