Cheaper to buy than rent in many markets

With the surplus of foreclosed and distressed properties stifling home prices and the high demand for rental properties, it now costs consumers less to buy a home than rent in 74 percent of the major U.S. cities, according to a recent survey from Trulia. The data showed the top cities where it is better to buy than rent are Las Vegas, Nevada, Detroit, Michigan, and Mesa, Arizona. The top cities where renting is still cheaper than buying include New York City, New York, Fort Worth, Texas, and Omaha, Nebraska.

Ken Shuman, head of communications at Trulia, said low mortgage rates and falling home prices can entice financially stable homebuyers, but they would still face obstacles preventing a purchase.

"Today, many banks are actually less enthusiastic about providing residential mortgage applications, which has dragged out the home buying process," Shuman said. "Until a middle ground on lending practices can be met, many highly qualified buyers may be forced to be renters by choice for now."

Aside from the cost difference between renting and owning, other factors should be considered when deciding on a housing selection. CNN reported that consumers should think about how long they plan to stay in the residence, whether they have enough cash for closing costs, if they can afford to maintain a home and if they are able to claim the tax advantages of homeownership. If a potential homebuyer cannot reap the benefits of owning a home, renting may still be a better option. 

More News