Jun 21, 2012, 3:20 PM
5 Housing Markets Where Renting Beats Owning
SmartMoney Blogs
By AnnaMaria Andriotis
In theory, plummeting home prices and record-low interest rates should make buying a home cheaper than renting one. But experts say in some parts of the country, it still pays to be a tenant.
Despite the incentives to buy now — namely that average rates on a 30-year mortgages are now 3.7% — sales of single-family existing homes slipped 1.5% in May from a month earlier, according to data released today by the National Association of Realtors. Experts say the drop, which came during the historically busy spring season, suggests the housing market has a way to go to recover. If anything, the ranks of American homeowners are dwindling. The homeownership rate in the U.S. fell slightly from 66% to 65% during the first quarter of 2012 — the lowest in 15 years, according to the latest data by the U.S. Census. (It peaked at just over 69% in 2004.)
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On the national level, it is cheaper to buy than rent, according to a March 2012 report by Deutsche Bank – even after taking into account the down payment and property taxes. But in some areas, including California and the Northeast, renting remains more affordable than buying. The report identified 13 cities where renting costs less than the after-tax mortgage payment (that’s the mortgage expenses the owner incurs, along with the mortgage interest deduction they get come tax season).
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Northern New Jersey
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Long Island, New York
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California
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Seattle
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Honolulu
Full article: http://blogs.smartmoney.com/advice/2012/06/21/5-housing-markets-where-renting-beats-owning/
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