Millennials better off buying a home than renting

Katherine Feser  /  Houston Chronicle photo

Houston topped a list of cities where buying a home beats renting for millennials, according to a report by real estate listing firm Trulia.

Trulia’s Rent vs. Buy report found that buying a house is 23 percent cheaper than renting nationwide for young households. It’s an even better deal in Houston, where it’s 46 percent cheaper to buy than rent.

The Houston calculations are based on a median home price of $162,784 in September, and median rent of $1,550 per month.

Trulia crunch the numbers for millennials using the Census’ 2014 American Community Survey and a Trulia consumer poll. The calculations are based on households ages 25-34, who tend to move every five years, a 10 percent down payment, a 3.87 percent mortgage rate on a 30-year loan. The potential buyers itemize their federal tax deductions and are in a 25 percent tax bracket.

The study found that buying is cheaper than renting in 98 of the nation’s top 100 markets. The rent versus buy gap varies by metro because home prices, rents, property taxes, and home-price appreciation are specific to each market.

Here’s how other cities stack up, based on the median price, rent and cost of buying versus renting percentage:

  1. Houston, $162,784, $1,550, -46%
  2. Baton Rouge, $154,940, $1,395, -45%
  3. Syracuse, NY, $118,999, $1,375, -44%
  4. Fort Lauderdale, Fla., $200,734, $1,750, -44%
  5. Miami, Fla., $241,740, $1,955, -43%,
  6. New Orleans, $169,688, $1,500, -43%
  7. Tampa, Fla, $151,974, $1,300, -42%
  8. Oklahoma City, $130,095, $1,195, -42%
  9. Detroit, $60,465, $850, -42%
  10. San Antonio, $141,907, $1,295, -42%

Here’s where renting beats buying, and “where it’s a tough call”.

  1. Honolulu, $612,642, $2,500, 5%
  2. San Jose, Calif., $907,806, $3,500, 2%
  3. Orange County, $639,129, $2,800, -5%
  4. San Francisco, $1,100,000, $4,400, -7%
  5. Oakland, Calif., $617,357, $2,800, -7%,
  6. Sacramento, Calif., $326,910, $1,650, -8%
  7. Newark, $326,045, $2,200, -10%
  8. San Diego, $488,959, $2,325, -10%
  9. Ventura County, Calif., $514,053, $2,500, -11%
  10. New York, $437,834. $2,350, -11%

(Negative numbers in the lists mean it’s cheaper to buy than rent.)

Trulia bases the median values and rents for all the homes in the 100 largest metro areas in September 2015.

Reference:

Millennials better off buying a home than renting

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s