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    Buying Is Now 26.3% Cheaper Than Renting in the US

    Buying a home in North Atlanta makes sense financially, Todd Lemoine TeamThe results of the latest Rent vs. Buy Report from Trulia show that home ownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage, in 98 of the 100 largest metro areas in the United States.

    In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in all but two metropolitan areas.

    It’s no surprise, however, that those two metros are San Jose and San Francisco, CA, where median home prices have jumped to over $1 million dollars this year. Home values in San Jose have risen 29% in the last year, while rents have remained relatively unchanged.

    For the 98 metros where home ownership wins out, including Atlanta, 97 of them show a double-digit advantage when buying. The range is an average of 2.0% less expensive in Honolulu (HI), all the way up to 48.9% in Detroit (MI), and 26.3% nationwide!

    Below is a map of the 100 metros that were studied. The darker the blue dot on the metro, the cheaper it is to buy there.

    Buying a home cheaper than renting in North Atlanta, Todd Lemine Team

     

    In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here.

    Below is a chart created with the data from the last six years of the study, showing the impact of the median home price, rental price, and 30-year fixed rate interest rate used to calculate the “cheaper to buy” metric.

     

    Renting a home more expensive than buyingin North Atlanta, Todd Lemine Team

    In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

    Cheryl Young, Trulia’s Chief Economist, had this to say, “One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

    Bottom Line

    Home ownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home.

    If you want more information about buying a home and how to afford a new home, please contact the Lemoine Team. We’re here to help. You can search all North Atlanta homes on our website at http://www.LemoineTeam.com or contact us at 404-310-9992.

    The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Todd Lemoine and Keeping Matters Current, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Todd Lemoine and Keeping Matters Current, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein. Equal Housing Opportunity.

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