Saturday, May 19, 2018
Business

Buying a home vs. renting a home

CHICAGO

It's much cheaper to buy a home than rent one in 100 of the largest U.S. metropolitan areas, according to a report released recently by the real-estate website Trulia.

"Despite the recent (home) price rebound, rents continue to rise faster than (home) prices, and mortgage rates are near record lows," said Jed Kolko, Trulia's chief economist, in a news release. And that's leading to favorable homeownership costs in most corners of the country.

In its analysis, Trulia looked at the average price of all homes for sale and the average rent of all homes for lease on the website between the beginning of June and the end of August. Averages for the metropolitan areas include properties from the inner cities to the suburbs.

The report reflects increased affordability for homeowners compared with the winter, when Trulia last did this analysis. The last time around, it was better to buy in 98 of the top 100 markets, Kolko said. But mortgage rates have dropped since then, and rents have risen faster than home prices.

According to the report, homeownership affordability, compared with renting, was highest in Detroit, where the average cost of owning a home is $349 a month and the average cost of renting one is $1,149 a month, a 70 percent difference.

Other markets where homeownership affordability is high: Gary, Ind. ($616 to own, $1,649 to rent, 63 percent difference); Oklahoma City, Okla. ($590, $1,578, 63 percent; Lakeland-Winter Haven ($495, $1,276, 61 percent); and Toledo, Ohio ($476, $1,222, 61 percent).

Tampa-St. Petersburg area is not far behind at $594 to buy, $1,393 to rent, a 57 percent difference.

On the other end of the spectrum: Honolulu, where home affordability, compared with renting, was the lowest of the 100 areas. The monthly cost of homeownership in Honolulu is an average $1,519 and the monthly cost of renting is an average $2,007. That's a 24 percent difference of $488 a month.

Other markets where homeownership affordability is lower: San Francisco; New York; San Jose, Calif.; and Los Angeles.

For homeowners, Trulia assumed a 3.5 percent mortgage rate, itemized deductions at the 25 percent federal tax bracket, and a seven-year time horizon to hold on to the property. It included closing costs, maintenance, insurance and property taxes.

For renters, it included security deposit and renter's insurance.

Even in a scenario where the homeowner could only obtain a 4.5 percent mortgage, didn't itemize on taxes and only planned on staying in the home for five years, it was cheaper to buy in 96 markets, Kolko said.

Despite being more affordable to buy in many markets, often people can't take advantage, Kolko said.

"It takes years to save enough for a down payment, and it takes a high credit score to even qualify for a mortgage, let alone to get the best rate. In the recession, many people found it harder to save — and harder to keep up their credit scores," Kolko said in the release.

"Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes," he said.

Comments
Camping without the hassle: New service rents you all the gear you need, plus the car

Camping without the hassle: New service rents you all the gear you need, plus the car

One day in April, I returned from a camping trip - a quick 24 out of the city - and ran a load of laundry. Whatís more telling is what I didnít do.I didnít hose down a muddy tent, I didnít soak a shoddily cleaned pot, and I categorically did not empt...
Published: 05/19/18
Romano: Save your money, sports betting wonít be in Florida anytime soon

Romano: Save your money, sports betting wonít be in Florida anytime soon

It is the middle of the day and the beginning of the off-season at Tampa Bay Downs. That means the action is limited to simulcast wagering, and that means the televisions outnumber the bettors.The parimutuel industry is long past its heyday in Americ...
Published: 05/19/18
Son of Crabby Billís founder leaves complex legacy of troubled projects and good deeds

Son of Crabby Billís founder leaves complex legacy of troubled projects and good deeds

SOUTH PASADENA ó Like his father, who founded the Crabby Billís seafood restaurant chain, John Loder Sr. had a larger-than-life personality. That was one reason he dived into the real estate business, becoming a well-known, if at times controversial ...
Published: 05/18/18
Updated: 05/19/18
Global Tampa Bay initiative seeks to grow direct foreign investment through expanded regional teamwork

Global Tampa Bay initiative seeks to grow direct foreign investment through expanded regional teamwork

TAMPA ó A decade ago, the Great Recession put Hillsborough and Pinellas countiesí efforts to grow their foreign exports on hold.But since then those efforts have returned, gained support and momentum, expanded the range of their ambition and are now ...
Published: 05/18/18
Florida unemployment holds at 3.9 percent, state adds 9,600 jobs

Florida unemployment holds at 3.9 percent, state adds 9,600 jobs

Floridaís economy appears to have plateaued with its unemployment rate holding at 3.9 percent for the seventh straight month, according to the April report released Friday.But some economists say it may be a good thing if the rate doesnít fall much m...
Published: 05/18/18
Lawsuit over Riverwalk Place tower in downtown Tampa settled

Lawsuit over Riverwalk Place tower in downtown Tampa settled

TAMPA ó A lawsuit over the mix of residences and offices in the planned $350 million Riverwalk Place tower has been dropped.Last August, Riverwalk Tower Investment-Intown LLC, which had been expected to be one of the developers in the project, filed ...
Published: 05/18/18
Orlandoís new attractions power jump in theme park attendance

Orlandoís new attractions power jump in theme park attendance

By MIKE SCHNEIDERORLANDO ó The arms race to build new theme park attractions in Orlando is paying dividends. A new report released this week shows theme park attendance at the largest parks in North America last year was up 2.3 percent, powered by ne...
Published: 05/18/18
How Mosaicís relocation could help Tampa International Airport land a flight to Brazil

How Mosaicís relocation could help Tampa International Airport land a flight to Brazil

Tampa International covets a nonstop flight to S„o Paulo, Brazil. Mosaic Co, which is moving its headquarters to Hillsborough County, has huge holdings in the country, including several mines. Could Mosaicís relocation help TIA realize its dream? It ...
Published: 05/18/18
Remember that upscale Guy Harvey RV resort near Tarpon Springs. Forget the Guy Harvey part

Remember that upscale Guy Harvey RV resort near Tarpon Springs. Forget the Guy Harvey part

HOLIDAY ó A year ago this month, Guy Harvey Outpost Resorts announced plans for its first-ever RV park, near Tarpon Springs where the Anclote River empties into the Gulf of Mexico.The $35 million resort, named after the popular Jamaican marine artist...
Published: 05/18/18
American Dream Miami to become largest mall in U.S. after final approval

American Dream Miami to become largest mall in U.S. after final approval

MIAMI ó A gigantic $4 billion retail and entertainment complex won government approval Thursday after years of debate, greenlighting what promises to be the largest mall in North America, just a few miles from the environmentally sensitive Everglades...
Published: 05/18/18