租还是买（转载）

By Jed Kolko, Chief Economist

March 20th, 2013

Buying a Home 44% Cheaper than Renting Despite Rising Home Prices

Low mortgage rates have kept homeownership less expensive than renting in all 100 large metros

Even though asking home prices rose 7.0% in the last year, outpacing rent increases of 3.2%, the gap between buying and renting has narrowed only slightly. One year ago, buying was 46% cheaper than renting. Today’s it’s 44% cheaper to buy versus rent. In fact, homeownership is cheaper than renting in all of America’s 100 largest metros. That’s because falling mortgage rates have kept buying almost as affordable, relative to renting, as it was last year. According to Freddie Mac, between February 2012 and February 2013 the 30-year fixed rate dropped from 3.9% to 3.5%, though rates have been rising in March.

To determine whether renting or buying a home costs less, we do the following:

1. Calculate the average rent and for-sale prices for an identical set of properties. For this report we looked at all the homes listed for sale and for rent on Trulia from December 2012 to February 2013. We estimate prices and rents for the similar homes in similar neighborhoods in order get a direct apples-to-apples comparison. We are NOT just comparing the average rent and average price of homes on the market, which would be misleading because rental and for-sale properties are very different: most importantly, for-sale homes are 47% bigger, on average, than rentals.
2. Calculate initial total monthly costs of owning and renting, including maintenance, insurance, and taxes.
3. Calculate future total monthly costs of owning and renting, taking into account price and rent appreciation as well as inflation.
4. Factor in one-time costs and proceeds, like closing costs, downpayments, sales proceeds, and security deposits.
5. Calculate net present value to account for opportunity cost of money.

To compare the costs of owning and renting, we assume people will get a 3.5% mortgage rate, reside in the 25% tax bracket and itemize their federal tax deductions, and will stay in their home for seven years. We also assume buyers get a 30-year fixed-rate mortgage and put 20% down. Under all of these assumptions, buying is 44% cheaper than renting nationwide, taking into account all of the costs and proceeds from buying or renting over the entire seven-year period. We also look at alternative scenarios by changing the mortgage rate, the income tax bracket for tax deductions, and the number of years one stays in the home. Our interactive map shows how the math changes under alternative assumptions. And if you’re interested, check out our detailed methodology which explains our entire approach, step by step.

Savings from Buying Versus Renting Smallest in California and New York, Biggest in the Midwest
Buying a home is cheaper than renting in all of the 100 largest metro areas, but buying ranges from 19% cheaper than renting in San Francisco to 70% cheaper than renting in Detroit. The financial benefit of buying instead of renting is narrowest in San Francisco, Honolulu, San Jose, and New York.

Over the past year, the gap between renting and buying has narrowed most in the Bay Area. One year ago, buying was 35% cheaper than renting in San Francisco and 38% cheaper than renting in San Jose; now, the difference is 19% and 24%, respectively. These metros have seen strong price increases year-over-year. In contrast, the gap didn’t narrow at all in New York, where buying remains 26% cheaper than renting, both now and a year ago. On Long Island, the difference actually widened from 34% one year ago to 36% today. New York, Long Island, and other Northeastern metros have seen more modest price rebounds over the past year, despite rising rents:

Where Buying a Home is a Tougher Call
#	U.S. Metro	Cost of Buying vs. Renting (%), 2013	Cost of Buying vs. Renting (%), 2012
1	San Francisco, CA	-19%	-35%
2	Honolulu, HI	-23%	-26%
3	San Jose, CA	-24%	-38%
4	New York, NY-NJ	-26%	-26%
5	Albany, NY	-30%	-34%
6	Orange County, CA	-32%	-41%
7	San Diego, CA	-33%	-42%
8	Los Angeles, CA	-35%	-37%
9	Long Island, NY	-36%	-34%
10	Ventura County, CA	-36%	-43%

Note: Negative numbers indicate that buying costs less than renting. For example, buying a home in San Francisco is 19% cheaper than renting in 2013. Trulia’s rent vs. buy calculation assumes a 3.5% 30-year fixed-rate mortgage, 20% down, itemizing tax deductions at the 25% bracket, and 7 years in the home.

At the other extreme, homeownership is most affordable in Detroit, where buying is 70% cheaper than renting. This means it costs less than one-third as much to buy a unit than to rent a similar unit in a similar neighborhood. In fact, buying is less than half the cost of renting (more than a 50% difference) in 46 of the 100 largest metros.

Where Buying a Home is a No-Brainer
#	U.S. Metro	Cost of Buying vs. Renting (%), 2013	Cost of Buying vs. Renting (%), 2012
1	Detroit, MI	-70%	-69%
2	Dayton, OH	-63%	-70%
3	Gary, IN	-63%	-60%
4	Cleveland, OH	-63%	-57%
5	Warren-Troy- Farmington Hills, MI	-63%	-64%
6	Toledo, OH	-62%	-59%
7	Memphis, TN-MS-AR	-62%	-61%
8	Kansas City, MO-KS	-60%	-55%
9	Birmingham, AL	-59%	-60%
10	Indianapolis, IN	-58%	-56%

Note: Negative numbers indicate that buying costs less than renting. For example, buying a home in Detroit is 70% cheaper than renting in 2013. Trulia’s rent vs. buy calculation assumes a 3.5% 30-year fixed-rate mortgage, 20% down, itemizing tax deductions at the 25% bracket, and 7 years in the home.

In the largest metros, the rent-versus-buy decision depends largely on location. Within the New York metro area, buying is just 6% cheaper than renting in Manhattan, but 53% cheaper in suburban Westchester County. This, however, is an extreme example. The differences within most metros aren’t quite so stark. In the Los Angeles metro area, buying is 22% cheaper than renting in the Pasadena / San Gabriel Valley area (telephone area code 626), while buying is 36% cheaper than renting in the San Fernando Valley (area code 818). The difference between the 626 and the 818 is a lot smaller than the difference between Manhattan and Westchester.

Here’s How Renting Could Be the Better Deal
Three factors have a real impact on the rent-versus-buy math: mortgage rates, tax deductions, and how long you stay in your home. Change any of these factors, and buying a home won’t look quite as inexpensive relative to renting. Using our baseline assumptions of getting a 3.5% mortgage rate, deducting at the 25% bracket, and staying in your home for 7 years, buying is 44% cheaper than renting nationally. Here’s the “but”:

• Lower mortgage rates lower the cost of owning. While buying is 44% cheaper than renting with a 3.5% mortgage, buying would be 39% cheaper than renting at 4.5% and only 33% cheaper at 5.5%. Higher rates mean a higher cost of owning, but prices today are low enough relative to rents that buying would beat renting even if mortgage rates rose two full points.
• Itemizing deductions lowers the cost of owning. Mortgage interest and property tax payments are typically deductible. If you itemize deductions (at the 25% tax bracket) regardless of whether you own or rent, buying is 44% cheaper. Without itemizing (read: you’re just taking the standard deduction), buying is still 35% cheaper than renting. This means that even if tax deductions were eliminated entirely – don’t worry, no one in Washington is seriously proposing anything that drastic – the rent-versus-buy decision probably wouldn’t change that much. Though it would probably encourage people to buy smaller or cheaper homes.
• Staying put longer lowers the relative cost of owning. The combined cost of buying and then selling a home can easily total more than 10% of the home’s value. Staying put longer means, in effect, spreading those costs over more years. Buying is 44% cheaper than renting if you stay put for 7 years, 37% for 5 years, and 20% for 3 years.

In other words, depending on your circumstances, buying could be a bad deal. Suppose you stay put for only 3 years AND don’t itemize your deductions (lots of homeowners with mortgages don’t itemize, by the way). Even with a 3.5% mortgage, buying would be only 9% cheaper than renting nationally. And in many markets, buying would be MORE expensive than renting if you stay put for 3 short years and don’t itemize: buying would be 2% more expensive than renting in Boston, 9% more in Los Angeles, 26% more in New York, and 45% more in San Francisco. Clearly, buying is not for everyone — especially if you live in a more expensive housing market.
 

Remember, also, that owning carries a lot more risk than renting. Some of the factors affecting the cost of ownership involve a lot of uncertainty.

• One uncertainty: you might plan to stay in your new home for a long time, but unexpected family or employment circumstances could make it necessary to move sooner and incur those closing costs after just a few years.
• A second uncertainty: unforeseen maintenance or renovation problems could push the annual care and upkeep costs much higher than 1% of the home’s value, which is what we included in our model.
• And, of course – as if this needs to be said after the last few years – there’s no guarantee that home prices will rise. We’ve used a conservative estimate of a little over 2% home price appreciation per year, varying a bit by metro – which is just slightly above the rate of inflation we’ve included. But actual appreciation could be much higher or lower than that. Price declines are always a risk, and not just in Las Vegas and Detroit. Even metros that didn’t see huge price declines during the most recent housing crisis have sustained price declines in the past. For instance, prices fell by more than 20% in much of Texas and Oklahoma in the late 1980’s, and by 10-20% across much of New England and upstate New York in the early 1990’s, according to FHFA.

Buying Probably Won’t be This Cheap Relative to Renting Next Year
How will the rent-versus-buy math change over the next year? Two factors matter most: (1) whether prices or rents are rising faster, and (2) what’s happening to mortgage rates. Looking forward, the gap should narrow more sharply because both factors should work together to raise the cost of buying relative to renting.

First, home prices are likely to keep rising faster than rents. The continued economic recovery will make people more able and interested to buy a home, boosting the demand for housing while inventory remains tight, fueling price increases. At the same time, the increase in multi-unit-building construction should add more supply, especially to the rental market, which will keep rent gains modest.

Second, mortgage rates are likely to rise in the next year as the economy improves, even though they fell in the past year. The consensus among macroeconomic forecasters is for 10-year Treasury bonds –which 30-year fixed-rate mortgages track pretty closely – to rise 6 or 7 tenths of a point over the next year. This translates roughly into a 7-9% higher monthly payment for a given mortgage.

Together, prices outpacing rents and higher mortgage rates will make buying less affordable next year relative to renting than it is now. By this time next year, the cost of buying could even exceed the cost of renting in some of the priciest metros. The rent-versus-buy decision depends on so many factors, both economic and personal, and next year the math could look very different.