The Rent vs Buy Dilemma Affordability Depends on the City

first_img Buy Home Housing Market Rent SmartAsset 2016-01-19 Staff Writer January 19, 2016 740 Views in Daily Dose, Data, Featured, Origination Sharecenter_img The Rent vs. Buy Dilemma: Affordability Depends on the City Many economists expect home prices to continue their upward trend into 2016 but at a slower pace. Although home prices continue to rise, purchasing a home is still a better choice across the U.S. compared to renting.For many years, buying a home has been considered to be an obvious choice when compared to renting a home, but this is not always the case. For some, it may make more sense to purchase a home versus renting a home and vice versa.A new report from Smartasset found that the answer is simple: It all depends on where you live.Today, there is no clear answer to the rent versus buy question. In some cities, and for some individuals, buying a home may make more sense, while for others, renting a home may be the better choice.”If you were spending 30 percent of your income on housing anyway, might as well spend that hard-earned dough on something that would retain its value for you in the future,” Smartasset said. “Renting, in contrast, was like lighting your money on fire and tossing it in the trash. The rent versus buy decision was a straightforward one.”The report continued, “That all changed in 2007, when the housing bubble that had been silently growing suddenly went pop. A house, it turned out, could lose value—and, as some real-life cases demonstrated, could do so in spectacular fashion. Those with the misfortune to buy at the peak of the market in 2006 lost thousands or even millions of dollars overnight. Mortgages went underwater. A foreclosure crisis ensued. Meanwhile, the renters of the world were doing relatively well.”Smartasset weighed the pros and cons of renting and buying a home by reviewing the non-economical and non-financial aspects of the equation.  The report found that renting is more flexible than buying a home because you can change locations at the end of the lease. However, on the other hand, buying a home provides pretty solid payment continuity, while rents can change at the drop of a dime. In addition, the hidden cost of maintenance on a purchased home is another downside.So where is buying a home better than renting?The Smartasset data found that buying a home in Allegany, New York is better than renting after 4.5 years, with an average mortgage payment of $164 and an average rent payment of $907. Carter, Missouri and Burleson, Texas followed with average mortgage payments of $442 and $541, respectively.Smartasset’s Best Places to Own a HomeClick here to read the full report.last_img read more

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