Renting vs Buying

Couple Front StepsIf you are a potential buyer searching for the perfect place to live, your gut reaction is probably that it is cheaper to rent a home than it is to buy one. However, according to Trulia’s chief economist Jed Kolko, that is not the case. On average in the United States, it is 38 percent cheaper to buy a home than it is to rent one. Of course, this varies from state to state.

 

Of course, while the base cost of buying a home is cheaper than renting one, there are many other factors to be looked at before deciding between the two. Are you looking to stay somewhere for an extended period of time, or will you be living there for less than 10 years?

 

Upkeep is also something to consider while looking for a place to live. On paper the cost of buying a house may be lower, but overall it actually may be less expensive to rent if you have to continually have maintenance work done.

 

Renting also has the upper hand for people looking for jobs. If you are still moving around the job market or do not have a stable long-term position, it is likely more financially responsible to rent a house so that you are able to move if necessary. However, if you are looking to settle down somewhere, in the long run it looks as though it is more profitable to buy a house rather than rent one.

One Comment Add yours

  1. NCCYou says:

    I’m a Financial Wellness Advocate for a credit union in Minnesota and I just wrote a post on renting versus buying, myself. You can check it out at http://nccyou.wordpress.com/2014/06/26/renting-vs-buying-a-home/, if you’re interested.

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