In the latest Rent vs. Buy Report fromÂ Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!
A studyÂ byÂ GoBankingRates looked at the cost of renting vs. owning a home at the state level and concluded that in 39 states, it is actually â€˜a littleâ€™ or â€˜a lotâ€™ cheaper to own (represented by the two shades of blue in the map below).
One of the main reasons owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows.Â Freddie MacÂ reports that the current interest rate on a 30-year fixed rate mortgage is 3.91%.
Nationally, rates would have to reach 9.1%, a 128% increase over todayâ€™s average of 4.0%, for renting to be cheaper than buying. Rates havenâ€™t been that high since January of 1995, according to Freddie Mac.
Source: Keeping Current Matters