The Secret That Makes Buying Cheaper Than Renting in 39 States
In the latest Rent vs. Buy Report from Trulia, homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
A look at the cost of renting vs. owning a home by GoBankingRates concluded that in 39 states, it is actually ‘a little’ or ‘a lot’ cheaper to own. The good news is, Florida is one of those ‘a lot’ cheaper states. (Yay!)
One of the main reasons owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that the current interest rate on a 30-year fixed rate mortgage averages 3.91%.
Nationally, interest rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995.