With mortgage rates still hovering near all-time lows and the housing market slowly beginning to heat up, you could easily argue that there’s never been a better time for buying a home.
Thanks to tighter lending restrictions, however, and an economy that’s still largely in recovery mode, the American dream of owning a home has changed somewhat for many would-be buyers.
The number of people choosing to rent rather than buy has surged over the past few years and as of 2013, there were about 43 million renter households in the U.S.
While there are some definite advantages that go along with renting, rising demand for properties has pushed rental rates to new highs. Nearly half of middle-income renters are shelling out 30% or more of their pay on housing.
With the cost gap between renting and buying a home narrowing, it’s worth wondering if it’s time to make the leap into home ownership. Here are a few important things worth thinking about when you’re considering renting or buying a home.
How the cost compares
Whether it’s cheaper to rent or buy is really subjective and it depends on several factors, starting with where you live.
According to Trulia’s 2014 Rent vs. Buy Report, owning a home is actually 38% cheaper than renting on average, at least in the nation’s 100 largest metro areas. While that seems like a pretty big difference, the numbers vary when you take a closer look. In Detroit, for example, buying is actually 66% cheaper compared to just 5% in Honolulu.