Trulia has a helpful new tool on its website that allows users to enter certain variables in markets across the country and determine which is the better bet for them financially: buying a home or renting. The news is not good for defiant, perennial renters, unless they live in New York or in California.
According to Trulia’s tool, it is always, always cheaper to buy in Philadelphia, no matter how many years you’ll stay in the home, what mortgage rate you can get, and how you handle your income taxes and deductions. There are some wrinkles, though, that Trulia can’t take into account for our city. Here’s how the site describes its methodology:
Trulia looks at homes for sale and for rent and calculates the average rent and sale price across all listed properties in a metro area. Then, Trulia factors in the total costs of homeownership (e.g., closing costs, maintenance, insurance, taxes, etc) and total cost of renting (e.g., renter’s insurance and security deposit).
The total costs of homeownership in Philadelphia might turn out to be different after AVI, so in the circumstances when Trulia notes the difference between renting and buying is just a few percentage points (when someone is less solvent financially), future property tax shifts could alter the picture.
• Rent vs. Buy: Which is Cheaper for You? [Trulia]