Buying is Now 33.1% Cheaper than Renting in the US & 50.1% Cheaper in Baton Rouge & New Orleans

Hey everyone Javier Santana here with some more real estate news and tips. A lot of first time home buyers ask me if buying is cheaper than renting. I always say of course buying is way less expensive, a bit more upfront costs, but in the long run (2-3 years really) buying is less expensive. And at the end of it all, you pay down your mortgage and can build equity in the property, so when you are ready to sell, you are getting back a good chunk of change instead of wasting it all away with rent. Mandeville, Covington, and Madisonville area is a safe bet in the real estate market which has had some good appreciation in the last 10 years. 

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA) & New Orleans (LA), and 33.1% nationwide!

Other interesting findings in the report include:

•Interest rates have remained low and, even though home prices have appreciated around the New Orleans Metro area, Mandeville, Madisonville, Covington, and West St.Tammany as a whole,  they haven’t greatly outpaced rental appreciation.

•With rents & home values moving in tandem, shifts in the ‘rent vs. buy’ decision is largely driven by changes in mortgage interest rates.

•Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with your local real estate professional Javier Santana, who can help you find your dream home in West St.Tammany (Mandeville, Covington, Madisonville, Abita Springs, & Folsom)

Javier Santana