Cost Between Renting and Owning Narrows
The cost difference between buying and renting is as narrow as it has been since 1993, according to a study on homeownership by Marcus & Millichap Real Estate Investment Services for the Associated Press.
The study examined rent and home prices in 45 metropolitan areas and concluded that gap between a payment on a median-priced home and median rent on a similar property is on average only $256.
Marcus & Millichap calculated the number using median home prices for the last three months of 2009, assuming a 10 percent down payment on a 30-year fixed-rate loan at 5.07 percent. It factored in mortgage insurance, but didn’t include either repair costs or tax benefits.
The difference is narrowest in such hard-hit markets as Detroit, Las Vegas, Atlanta, Cleveland, Indianapolis, and Orlando.
Renting remains significantly cheaper in New York, Los Angeles, Seattle, San Diego, San Francisco, and San Jose, Calif.
Source: Associated Press (04/19/2010)