SAN FRANCISCO -- Trulia recently released its Summer 2012 Rent vs. Buy Report, which provides the inside scoop on whether buying a home is more affordable than renting in America's 100 largest metropolitan areas. Looking at homes for sale and for rent on Trulia between June 1, 2012 and August 31, 2012, this study compares the average cost of renting and owning for all homes on the market in a metro area, factoring in all cost components including transaction costs, taxes and opportunity costs.
With a 3.5 percent mortgage, itemized deductions at the 25 percent federal tax bracket, and a seven-year time horizon, homeownership is cheaper than renting in all of the 100 largest U.S. metros by a wide margin. However, relative affordability depends largely on location. Buying a home is 24 percent cheaper than renting in Honolulu, 28 percent cheaper in San Francisco, and 31 percent cheaper in New York, but is 70 percent cheaper in Detroit. However, the actual dollar amount reveals that despite a low 28 percent difference in buying versus renting in San Francisco, the monthly dollar savings is big ($899) because rents and prices are so high in this region.
To view comparisons and other factors, visit: http://info.trulia.com/rentvsbuy-summer2012.