- Fast-rising home prices and higher mortgage rates have made it cheaper to rent a home than buy and own one.
- The monthly costs of buying and owning a home that you occupy are up 14 percent over the past year, more than three times the annual increase in rent rates nationally, according to Realtor.com. Rents are up just 4 percent.
- Renting and reinvesting the savings from renting, on average, will outperform owning and building home equity, in terms of wealth creation.
In 16 of the 23 major metropolitan markets covered in the research, renting is a better investment than buying. These cities include Atlanta, Dallas, Denver, Houston, Los Angeles, Miami, San Francisco and Seattle. It is still, however, better to buy than rent in much of the Midwest and Northeast, with Chicago and Cleveland showing the best ownership scores.
Absent some major outlying disaster, home prices are highly unlikely to fall, at least not nationally.
"Interest rates are low and few junk mortgages are out there," said William Hardin, director of Florida International's Jerome Bain Real Estate Institute. "Additionally, employment, income, and borrower credit ratings are all up. These are all good signs for a smoother transition this time around."
