Home prices have risen and mortgage rates have shot up by more than a percentage point – is it still cheaper to buy than rent in the Windy City?
The housing market of 2009, 2010 and 2011 was a homebuyer’s paradise. With home prices falling and mortgage rates at their lowest levels in decades, homeownership was so cheap that, in just about every major metropolitan area, it was far cheaper to own than it was to rent.
Now, though, things have changed. Not only have home prices risen aggressively in the last year, but mortgage rates have increased as well, and the two market forces have created a much different housing market for consumers in 2013.
But how different? Is homebuying, after all this change, still more affordable than renting, or have the tables turned? That was the question at the center of Trulia’s latest research, which looked at how the affordability situation has changed in the nation’s most prominent housing markets – and how it could change in the future. So how has it changed? See our infographic below to find out:
Renting vs. Buying in the New Housing Market
Does it still make sense to buy, rather than rent, in today’s housing market? To find out, we consulted new data from Trulia, which looked at the largest housing markets in the nation and compared their rental and for-sale markets, and put together the following charts, which compare the past two summers to when/if mortgage rates hit 6.0%.
NOTE: the graphs show the percentage that buying is cheaper than renting, but it assumes that the homebuyer itemizes their taxes in the 25% bracket AND stays in the home for at least seven years.