Buying is cheaper than renting in NYC, but perhaps not for much longer

March 22, 2013 04:00PM

Believe it or not, buying a home in New York City remains 26 percent cheaper than renting, a figure that has held steady over the past year, according to Trulia data. However, the gap between the two is closer than in other cities in the U.S.

For example, on Long Island, buying is now 36 less expensive than renting, compared to 34 percent less expensive last year. In Detroit, buying is a whopping 70 percent cheaper than renting.

At the same time, purchasing a home may not be worth it, depending on a buyer’s circumstances. If an owner lives at home for three years without itemizing tax deductions, buying would be pricier, according to Trulia. Living at one place for a longer time lowers the relative cost of owning, as it spreads the expenses of buying and selling over a greater number of years. Itemizing deductions means that a homeowner could deduct mortgage loan interest and property tax payments.

Over the next year, buying will be less affordable nationwide, Trulia said. Predicted rises in home prices and mortgage rates should together raise the cost of purchasing compared to renting. [Trulia]Zachary Kussin