What's Hot: Have Rising Interest Rates Affected Your Housing Search? | A $10,000 Incentive & the Final Chance to Buy at The Parks’ First Condominium
Trulia: Buying is 41 Percent Cheaper Than Renting in DC
Despite rising home prices, it is still cheaper to buy than to rent in DC (along with the 100 largest metros in the country), according to a report published today by Trulia.
In the DC area, buying is 41 percent cheaper than renting, while in the country as a whole, buying is 44 percent cheaper than renting. Last year, according to Trulia, buying was 46 percent cheaper than renting. But this advantage could close up next year, Trulia predicts: with prices rising faster than rents and mortgage rates moving up, the gap should narrow sharply by next year.
“Mortgage rates are likely to rise in the next year as the economy improves, even though they fell in the past year,” said Trulia’s Chief Economist Jed Kolko. “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.”
To determine their numbers, Trulia’s team compared the average rent and for-sale prices of an identical set of properties in each city. They considered the monthly costs associated with buying and renting and factored in one-time costs like downpayments and security deposits.
Trulia assumed that owners will have a 3.5 percent mortgage rate on a 30-year mortgage and will stay in their homes for seven years. However, they also created an interactive map to see how the numbers work with different assumptions. For example, if someone in the DC-area has 4.5 percent interest rate on their mortgage and plans on staying in their home for five years, buying is 26 percent cheaper than renting. With plans to move after three years, the advantage drops to five percent.
Trulia also sent us some DC-area specific stats, breaking down the region into the city proper and the surrounding counties. Check out the data below.

Note from Trulia: Negative numbers indicate that buying costs less than renting.
For Trulia’s full analysis, click here.
See other articles related to: trulia, rent vs buy, rent increase, housing prices
This article originally published at http://dc.urbanturf.com/articles/blog/trulia_buying_is_44_percent_cheaper_than_renting/6815
Most Popular... This Week • Last 30 Days • Ever

DC's homebuyer assistance programs can be a bit complex. This edition of First-Timer ... read »

The most detailed rendering yet has been unveiled for the 310-unit redevelopment of t... read »

A look around DC to find the most equity-rich neighborhoods.... read »

Just a month after setting a new high in March, the value of a house in DC skyrockete... read »

The National Capital Planning Commission will consider approval of the final master p... read »
- First-Timer Primer: DC's Home Buyer Assistance Programs
- Rendering Revealed for One of the Largest New Residential Developments in Friendship Heights
- Where Are People House-Rich in DC?
- $1.4 Million: The Price for a House in DC Hit a New High in April
- The Massive Development at DC's Armed Forces Home Looks to Get Key Approval in June
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. Visit guides.urbanturf.com or start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro