The affordable housing mantra has long been "Buy Cheaper than Rent". For a while there, when housing prices were escalating, it wasn't as commonly heard. Now its back, and rightfully so. Today's email came a story all about buying cheaper than rent in 98 out of 100 metro areas.
In most cases I agree with this statment. The only thing is that most cases don't always happen.
In reality, most home buyer's do not have the same standards when buying a house as they do when renting. Had that been the case, the real estate market probably wouldn't have accelerated and fallen as it did in 2008-2010. In visiting the rental homes of many first time buyers, they are often smaller and with fewer amenities than their "for purchase" counterparts. This greys the line of the statement "cheaper to buy than rent".
Buyer's typically buy with a mind to the future unlike renters. Considering future needs, such as household size and other future goals.
All things considered, with the market value of homes having dropped substantially, interest rates near historic low levels and mortgage interest written off on income taxes, and rent rates and rental occupancy increasing; its cheaper to buy than it is rent.
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