A home that recently hit the market in DC.
Despite rising home prices, it is still cheaper to buy than to rent in the DC area, according to a report published today by Trulia. However, that calculation is tipping more in favor of renting.
Trulia determined that buying is 17 percent cheaper than renting in the region. Renting would begin to make more sense than buying in the region if interest rates rose to 5.8 percent. When UrbanTurf has reported on this analysis in the past, the percent in favor of buying has been closer to 30 percent.
As we have reported when covering this analysis in the past, it is important to understand the criteria that Trulia uses when determining if it is cheaper to buy than rent in a metropolitan area.
The company calculates the figures assuming a 20 percent down payment on a 30-year, fixed-rate mortgage financed with a 3.85 percent interest rate. It assumes people itemize their federal tax deductions and are in the 25 percent tax bracket, and factors in renovation and maintenance costs, as well as insurance, utilities, and property taxes at the average metro property tax rate. For renters, the company tacks on renters’ insurance.
Perhaps most significant in the calculations is that Trulia assumes that a homeowner will live in the home for at least seven years.
If you don’t agree with the assumptions, Trulia has a rent-versus-buy calculator, so that users can play around with specific numbers.
This article originally published at https://dc.urbanturf.com/articles/blog/trulia_buying_17_cheaper_than_renting_in_the_dc_area/10486.
Most Popular... This Week • Last 30 Days • Ever
While homeowners must typically appeal by April 1st, new owners can also appeal.... read »
Home prices in the DC region have risen on an annual basis for seven consecutive mont... read »
Plans for a large new residential project above the Ellsworth Place mall in the middl... read »
A year ago, UrbanTurf reported on plans for a grocery store that was looking to open ... read »
With news this week that the Lerner family will not be selling DC's baseball team, it... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro