Is Buying Better Than Renting?

August 2, 2012
Is buying a home a better financial option than renting? This has been a debated questions for as long as I have followed the real estate market. The answer is "It depends". Some of the factors to be considered are :
1) How long do you plan to be in a particular location?
2) What are local rent prices versus mortgage payments?
3) What other costs are associated with home ownership? property taxes, upkeep,
4) What are the non-financial benefits of owning one's own home?
The Internet housing site, Zilllow, just published a report analysing more than 200 metropolitain areas and 7,500 U.S. cities. Interestingly, Zillow found that buying is a better option in the Riverside-San Bernardino area if you live in the home for at least two years.
This analysis took into consideration the low home prices, low mortgage rates as well as the rising rental prices.
If you are presently a renter and are thinking of buying a home, you can do the calculation. This calculation cannot predict whether a real estate market will see rising home prices or falling home prices. However, it can estimate whether your monthly housing expense is better, worse or the same if you buy or rent.