Why Rent When Buying is Cheaper?
The foreclosure crisis has knocked down prices so much in some parts of the country that it’s cheaper or only slightly more expensive to own than it is to rent.
BusinessWeek, with help from research firm Reis, calculated ownership costs assuming a fixed-rate, 30-year mortgage for 100 percent of the purchase price with no down payment. The magazine said that had they factored in a 20 percent down payment – what most people must make these days – owning would have been cheaper than renting in most metros.
“It’s a great time to buy,” says Mollie Carmichael, senior vice-president of John Burns Real Estate Consulting in Irvine, Calif. “If you can own a home for less than the cost to rent, then it’s a logical financial proposition.”
Here are the top-10 cities where buying is a bargain and the own vs. rent cost ratio for each:
1. Detroit, 94 percent
2. Pittsburgh, 97 percent
3. Rochester, NY, 113 percent
4. Memphis, 114 percent
5. Tampa, 115 percent
6. Cleveland, Tenn., 119 percent
7. Dayton, Ohio, 119 percent
8. Columbia, S.C., 123 percent
9. Orlando, 124 percent
10. Dallas-Fort Worth, 124 percent
Source: Business Week, Prashant Gopal (08/20/2009)
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