Buying a home is way cheaper than renting in all 100 of the nation’s largest metropolitan areas, including Seattle, according to a new report.
The average home ownership cost in the Seattle area is $978 a month, 42 percent lower than average rent, the real estate company Trulia reported. Nationwide, owning is 45 percent cheaper than renting.
“Despite the recent price rebound, rents continue to rise faster than prices, and mortgage rates are near record lows,” Trulia’s Chief Economist Jed Kolko said in a news release.
So why aren’t more people buying homes?
Because they can’t, Kolko said. “It takes years to save enough for a down payment, and it takes a high credit score to even qualify for a mortgage, let alone to get the best rate. In the recession, many people found it harder to save – and harder to keep up their credit scores.”
While buying is cheaper than renting by a wide margin across the country, the study still found a big range, noting that buying is 70 percent less expensive in Detroit but just 24 percent cheaper in Honolulu. Trulia also noted that the 28 percent buyer savings in San Francisco amounted to $899 a month, which is $99 more than Detroit’s 70 percent savings, thanks to its much higher cost of housing.
It’s also worth noting that Trulia’s calculation factors in a range of expenses, including closing costs, maintenance, insurance, property taxes on the purchase side and security deposit and renters insurance on the rental side. It also assumes owners will keep a house for seven years and itemize their taxes, so they can take the mortgage interest deduction.
“Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes,” Kolko said.
Are you a first time home buyer? Contact an agent at Heaton Dainard to get started. We have special informative information for first time home buyers that can help you understand how much you can afford and everything you need to know about buying in King, Pierce and Snohomish County.
