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Friday, October 31, 2014
Report shows rising rents are making homeownership cheaper in Dallas
Trulia says its 41 percent cheaper to buy than rent in the Dallas area. (Trulia)
With residential rents soaring in North Texas, a new report by Trulia Inc. says that it’s significantly cheaper to buy a home in the Dallas area.
The survey of the country’s 100 largest home markets found that buying a home in the Dallas area is 41 percent cheaper than renting a comparable property.
Nationwide, it’s 38 percent cheaper to buy vs. rent, Trulia said.
“Our analysis takes into account not just rent and the monthly mortgage payment, but also closing costs, insurance, maintenance, taxes, and other costs, as well as sales proceeds,” Trulia’s top economist Jed Kolko said in the report. “Buying is cheaper than renting in all of the 100 largest metros.
“The discount is smallest in Honolulu, where buying is 17 percent cheaper than renting, and largest in Detroit, where buying is 63 percent cheaper than renting.”
The comparison is based on buying a house with a 4.3 percent long-term loan and a 20 percent downpayment.
“Falling mortgage rates and rising rents have widened the benefit of buying versus renting,” Kolko said.
Trulia’s study acknowledges that young and first-time homebuyers have a tougher time getting a home loan and may not have as big an edge in buying vs. renting.
“Even in the tougher-call markets, buying probably won’t become more expensive than renting soon,” Kolko said. “Home price increases are slowing.”
North Texas apartment rents are at an all-time high of more than $900 a month. And the newest apartments now start at $1,200 and up.
Dallas isn’t the only Texas city where buying has an edge over home renting.
Trulia says that its 42 percent cheaper to buy in Fort Worth, 43 percent cheaper in Houston and 30 percent cheaper in Austin.