As rental vacancies and homeownership continue to fall, the dilemma faced by many young Americans—whether to rent or buy a home—has been well documented by media, which generally suggests buying is cheaper. But the call is getting tougher.
According to Trulia, when mortgage rates rise, the advantage buying has over renting won’t be as clear cut. In Honolulu and San Jose, Calif., it is cheaper to rent than buy, assuming homebuyers are using a 30-year fixed rate mortgage with a 20 percent down payment. In many other California cities, buying is not much cheaper than renting.
Cities where buying beats renting a home are Houston, Baton Rouge, Syracuse, Fort Lauderdale, and Miami.
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