According to Trulia’s new Buy vs. Rent report, buying in the Bay Area is about 25% cheaper than renting with a traditional 20% down 30 year fixed mortgage at today’s rates. In last year’s report that number was only 10% so what that tells us is that even though homes sales and prices may have evened out a bit, rents have continued to rise in the Bay Area, widening the gap. The tipping point? At current prices and rents, mortgage rates would have to rise above 7% to make renting cheaper.
The good news for potential Buyers is that even with a FHA loan with a 3.5% down payment, it’s still cheaper to buy than rent right now. According to Trulia, in the Bay Area it’s 10% cheaper to buy with this type of mortgage. The article has lots of useful information, graphs and illustrations that make it a worthwhile read.
The bottom line? Now is a great time to list a home for sale with the gap tipped so far in favor of buying and if you’re considering buying, now is the time to get started before mortgage rates increase as they’re expected to do.
Information and graphic courtesy of Trulia, where we’re Premier Agents meaning your listings get top of search results exposure…