Despite rising home prices, today’s low mortgage rates have kept homeownership from becoming more expensive than renting both nationally and in each of the 100 largest housing markets, according to a recent study done by Trulia. In fact, mortgage rates would need to rise to 10.6 percent for renting to become cheaper than buying nationally – and rates haven’t been that high since 1989. In New York Metro area the tipping point is 7.2 percent.
Looking at homes for sale and for rent on Trulia between December 2013 and January 2014, this study compares the average cost of renting and owning for all homes on the market within a metro, factoring in all cost components including transaction costs, taxes, and opportunity costs.
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