To rent or buy?

TRD New York /
May.May 11, 2011 11:16 AM

With U.S. mortgage rates lowering and rents set to increase with an upshoot in occupancy rates, real estate agents are proclaiming now is the time to buy a home. However, you can make an equally strong case for renting, according to the New York Times. In fact, it’s a pretty close race.

Neither mortgage rates nor rents are likely to quickly sky-rocket and house prices remain higher than their long term average. The relative merits of renting and buying have not been so equal since the beginning of the housing bubble, a decade ago.

Rent ratios provide a healthy framework for renting versus buying decisions, the Times said, and can be calculated by dividing the sales price of a home by the annual cost of renting a similar property. One should perhaps think of buying if that number is below 15. Miami’s average ratio is below 15 where New York’s is around 29. [NYT]


Related Articles

arrow_forward_ios
The bank is accused of systematically trying to foreclose on mortgages after the state’s six-year statute of limitations had passed. (Credit: iStock)

BNY Mellon faces suit over foreclosures from the housing crash

Seattle, Washington (Credit: iStock)

Good luck buying an affordable home in these US cities

They’re just like us! “Billionaire” manse buyer takes out $58M mortgage

They’re just like us! “Billionaire” manse buyer takes out $58M mortgage

Buyer sentiment was strong at the close of 2019 (Credit: iStock)

Home buyers start 2020 with drop in mortgage rates

(Credit: Getty Images, iStock)

Small Talk: Real Estate Predictions for 2020

Many are predicting a housing bubble (Credit: iStock)

Europe could be headed toward a housing crisis

Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Nonbank lenders could give serious boost to cooling housing market

arrow_forward_ios
Loading...