Interesting article written by the folks at Trulia states “Buying a home is cheaper than renting in 72 percent of the largest U.S. cities”. Their thoughts are that in many of the cities with high foreclosure rates such as Miami and Las Vegas, the demand for apartments is so high it’s driving rent rates up and making purchasing a better option.
The focus of the article however seems to miss the whole idea that buying a home to hold for the long term (7+ years) is almost always better than renting. It seems to focus solely on the cost to rent vs. the monthly mortgage payment and not the possible tax deductions, build-up of equity, pride of homeownership, or a variety of other factors. All of these, in my opinion, need to be considered.
For example, here in Indiana, the property tax caps on an income (rental) property are TWICE what they are on a personal residence. Don’t think the landlord is going to absorb the difference; it is going to be passed on to the tenant in the form of higher rent. 
Of course, there will always be goods reasons to rent a house or apartment. For instance, if you tend to move a lot or need to move soon, the down payment and closing costs, as well as selling costs can make buying a home very cost prohibitive. Also, there are a group of people who do not want to own a home and bear the responsibilities that it entails. They are, and may always be, renters.
The other unfortunate issue is that many would be buyers are forced to rent due to credit issues and/or foreclosures. Because of the tightened lending guidelines, they are ineligible to get a mortgage loan.
For a large number of apartment dwellers and house renters, now is the time to buy. Interest rates are still low, home prices are still low, and the most important aspect of the home financing process, the affordability factor is still low. In simple terms, this means that the buyer will spend less of their income to own a home today than they would have several years ago.
If you have questions, contact me. The home buying process can be daunting, but I promise to make it as simple and fun as possible!
Scott
Your Indiana mortgage expert specializing in FHA, VA, and USDA Rural Development loans.
Need cash to buy or refinance a home and make repairs or improvements? Ask about our FHA 203(k) Rehab loans.
