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Trulia: Cheaper to Buy Than Rent in DC
According to an analysis from real estate search website Trulia.com, it is currently cheaper to buy a home than rent one in 72 percent of the 50 largest cities in the country, including DC.
Trulia’s Rent vs. Buy Index, which launched last June, calculates the price-to-rent ratio using the median list price for two-bedroom properties compared with the median rent for two-bedroom apartments, condos and townhomes listed on its site. The index uses a rule of 15, which means that if the median list price divided by the annual median rent produces a score of 15 or less, the city is considered a good place to buy. The index is separated into three categories: The first includes cities with scores ranging from 1 to 15, places where it is more expensive to rent than to buy; the second, with scores of 16-20, are places where renting or buying is more situation dependent; and the third, with scores of 21 or higher, are places where buying costs are significantly greater than renting.
Sandwiched between Detroit and Indianapolis, DC scored a 12 on the Trulia scale, which means that it is one of the cities where it is much less expensive to buy than to rent. (Maybe this is why experts are expecting rent increases over the next few years.) The data used to produce this score — based on properties in DC proper — was a median monthly rent of $2,835 and a median list price of $401,399. For comparison, New York and San Francisco (which scored 31 and 21, respectively) are cities where you should continue to rent, according to Trulia.
While the index does provide perspective on the rent versus buy debate, an individual’s decision as to whether they will buy a home requires taking a number of variables into account (property taxes, down payment, interest rates) for the total cost of ownership, a point that Trulia acknowledges.
“We created the index to determine which cities have overpriced rent and which have underpriced,” Daisy Kong of Trulia told UrbanTurf. “The decision to buy a home is a very personal one and the index should just be used as a guide in that process.”
To see how DC compares to other cities in the country, check out this interactive map based on the index findings.
See other articles related to: dc home prices, dclofts, home buying, rent vs buy, renting in dc, trulia
This article originally published at https://dc.urbanturf.com/articles/blog/trulia_cheaper_to_buy_than_rent_in_dc/2892.
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