Buying is cheaper than renting in most U.S. cities

[jeffrey]

Home prices have taken such a beating and demand for rental units has increased so much that it's now cheaper to buy a two-bedroom home than to rent one in most major U.S. cities.

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying...

Buying is cheaper than renting in most U.S. cities - Aug. 16, 2011

[krantcents]

If that is true (in your city), you should buy and rent it out. I believe part of the reason for higher rents is tougher credit standards to buy.

[Nightfly]

The rent vs. buy debate pivots on so many variables; everyone's situation will be totally different. Just tonight, CBS News reported on homes up for sale that have been sitting idle even though their prices are at 2003 levels. With mortgage rates low and home prices at discounted rates vs. pre-housing bubble prices, the reasons for people renting vs. buying are most likely:

1) Banks have toughened their lending standards (as mentioned in the previous post) - possibly to the point of going to far, IMHO
2) Many folks are still out of work and wouldn't qualify for a mortgage under ANY circumstance
3) Some of us (myself included) are former homeowners that have discovered via renting the joys of NOT having to mow the lawn, clean the gutters, or scrub the mold (been there, done that) off of the basement ceiling
4) In the shoddy job market that we are now in, having the flexibility to leave a city or town quickly is an advantage, regardless of cost.

Many folks are questioning the idea of homeownership as "The American Dream". While I, for one, would like to someday own a home again - I take the realty industry's force-feeding of that dream to those of us in the general population with a HUGE grain of salt.

[Gary Barzel]

Economists generally hold that anything below 15 times the annual rent is a buyer-friendly city,and if prices are more than 15 times annual rents, then a market favors renters.