Renting is more expensive than owning in many cities

Home prices and mortgage rates are so low that it is cheaper to own a home than it is to rent in many cities.

By Mary Beth Nevulis, HousingZone Contributing Editor | December 6, 2011
rental housing, home market, housing market, home ownership

Home prices and mortgage rates are so low that it is cheaper to own a home –– more so now than at any point in the last 15 years –– than it is to rent in many cities, the Wall Street Journal reported on its blog.

The Wall Street Journal's third-quarter survey of housing-market conditions in 28 of the nation's largest metropolitan areas found that home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc. At the same time, rent levels have risen briskly across the country and mortgage rates, hovering around 4 percent, are the lowest in six decades.

Consequently, monthly mortgage payments on the median priced home—including taxes and insurance—are lower than the average rent levels in 12 metro areas, according to data compiled for The Wall Street Journal by Marcus & Millichap, a real-estate brokerage that tracked 27 metro areas. It is still less expensive to rent than to buy in 15 cities. But affordability hasn't done much to lift the sagging housing sector because many would-be buyers either don’t want to purchase a home or are unable to qualify for a mortgage.

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