Is It Cheaper To Buy A Home Than Rent

Dated: 02/26/2014

Views: 429

That depends on a number of factors.  According to a recent article in Fortune Magazine regarding an analysis by Trulia Chief Economist Jed Kolko, homeownership is 38% cheaper than renting nationally, and in all of the 100 largest metro areas.  This analysis was based on the following assumptions: ·        
  •   You buy a home with 20% down, and borrow the rest over 30 years at a fixed rate of 4.5% ·   
  •   Itemize your Federal Tax deductions and are in the 25% tax bracket
  •   Stay in your home for at least seven years ·         
  •   And home prices appreciate at a 2% annual rate
If any of these assumptions changed, and for instance prices decline, or interest rates rise to certain levels, then renting may be a better alternative.  However, given the current market in Northern Virginia it would appear that buying is a much better option for those who qualify.
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Chuck Rifae

Chuck Rifae has been a leading Northern Virginia Realtor since 2002. Chuck holds the advanced designation of Broker of Real Estate for both Maryland and Virginia. When Chuck is not working with buyer....

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