People often ask me if it is better to rent or buy a home. And, I tell them in most cases it is less expensive to buy. While every situation is different, the following figures can give you an idea of home ownership costs when considering not only your monthly mortgage payment but also tax savings and equity appreciation.
Another way to compare rent v. buy costs is to look at the price-to-rent ratio. This measures the relative affordability of renting and buying in a market. It is calculated as the ratio of home prices to annual rental rates. For example, in a market where the average home worth $200,000 rents for $1000 a month, the price-rent ratio is 16.67 using the formula: $200,000 / (12 x $1,000). Using this methodology, the real estate website Trulia estimates that nationally it is 33.1% cheaper to buy rather than rent.
In 2016, the Pittsburgh area had a price-to-rent ratio of 12, indicating it is an affordable market for buying a home when compared to rental rates.
Interested in learning more about the home buying process? Please contact me today at (412) 400-6627 or firstname.lastname@example.org.