If you plan to move to a big city, you should know that there are quite a few cities where it’s cheaper to buy than rent. A team at the online real estate company Trulia, which analyzed data on the median sale price and rents for similar homes in 100 metro areas, says that you might throw big bucks away if you are passing up a mortgage in favor of a lease. Also, deciding whether to buy or rent depends on the location and how long you plan to stay there because in some cities like Detroit or Toledo, the math favors buying but in other parts of the US, for example the more expensive coastal markets like Los Angeles or New York, the difference is not that big. This study has also shown that apparently homebuyers who remain in their homes for seven years will save an average of 38% over renting. Here are 7 major cities where it’s cheaper to buy than rent:
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1. Detroit
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According to Trulia, one of the cities where it’s cheaper to buy than rent is Detroit. The cost of buying versus renting there is -63% in 2014 compared to -65% last year. This study shows that nationally buying is 38% cheaper than renting under a baseline model of a 20% down payment 30-year loan, tax deductions at 25%, and staying seven years. If you plan to move to Detroit, then you should consider buying over renting, especially if you want to stay there a longer period of time.
2. Cleveland
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In Cleveland the cost of buying versus renting in 2014 is -58% compared to -54% last year. It’s a beautiful city located in northeastern Ohio on the southern shore of Lake Erie. As of the 2013 Census Estimate, the city proper had a total population of 390,113, making Cleveland the 48th largest city in the United States. If you plan to move there, you should consider buying over renting.
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3. Kansas City
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In Kansas City the cost of buying versus renting is -55% according to Trulia, compared to -53% in 2013. This city is one of ten regional office cities for the US Government, which is the largest employer in the Kansas City metro area. It’s officially named the City of Fountains and with over 200 of them, the city claims to have the second most in the world, just behind Rome.
4. New Orleans
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New Orleans is a major United States port and the largest city and metropolitan area in the state of Louisiana. Also, if you consider moving here and staying a longer period of time, then you should consider buying over renting because according to the people at Trulia, the cost of buying versus renting is -54% in 2014 compared to -51% in 2013.
5. Memphis
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Memphis is the largest city in the state of Tennessee, the largest city on the Mississippi River, the third largest in the Southeastern United States and the 20th largest in the United States. The cost of buying versus renting here is -54% in 2014 compared to -55% last year.
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6. Gary
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Gary is a city in Lake County, Indiana, located in the southeastern portion of the Chicago metropolitan area and the ninth-largest city in the state of Indiana. This city is known for its large steel mills and for being the birthplace of The Jackson 5. If you plan to move here, you should know that the cost of buying versus renting is -61% in 2014, compared to -65% last year.
7. Birmingham
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I’m talking about Birmingham, Alabama, which is the county seat of Jefferson County. Even though in this area, the steel economy has always played a crucial role in the local economy, Birmingham is also a leading banking center, serving as home to two major banks. The cost of buying versus renting here is -54% in 2014, compared to -50% last year.
There are a lot of cities across the US where it’s cheaper to buy than rent. I just mentioned a few in this little article but I’m sure that there are many more I could add to this list. Do you know any other cities where it’s cheaper to buy than rent? Please tell us about them in the comments section!
Sources:
news.investors.com
trulia.com
forbes.com
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