Renting VS Buying

Renting Versus Buying: 2011
This year California housing market conditions make a strong and compelling case for homeownership. With prices still well below the historic highs of just a few years ago and attractive mortgage rates, qualified buyers have a unique opportunity to own their own home.
The Monthly Savings of Buying Looks Enticing…
As seen to the right, a rigorous analysis of renting versus buying hears this conclusion out. As shown in the following chart, the monthly housing costs (principle, interest, taxes, and insurance or PITI) associated with buying a median-priced home of $301,430 is $1,590 (Fourth Quarter 2010 median priced home in California). This assumes the buyer is making a 20 percent downpayment and financing with a 30-year fixed rate mortgage at 4.62 percent. In comparison, the median rent on a three-bedroom two-bath apartment with renter’s insurance in California is $1,810. That means buying a home would save the homeowner $220 per month when compared to renting and the homeowner would save over $2,600 a year.
Renting Versus Buying in 2011
Renting Versus Buying Buying Median
Priced Home
Renting a
3Bdr/2Ba
Apartment
Mortgage Payment vs Rent $1,240 $1,790
Taxes & Insurance $350 $20
Total Monthly Housing Cost $1,590 $1,810
Monthly Housing Cost Savings Calculator
Out-of-Pocket Cost Savings of Buying
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Homebuyer Monthly Savings = $220
Homebuyer Annual Savings = $2,640
Homebuyer 5-Year Savings = $13,200
Assumes a 20% downpayment, a 30-yr FRM of 4.62%, and all