COVID19 UPDATE
Maui

Buying Real Estate – A Better Deal Than Renting in 74% of Major U.S. Cities

Buying real estate continues to be cheaper than renting in the vast majority of major U.S. cities, according to a quarterly rent vs. buy index from real estate search and marketing site Trulia.

The index compared the median list price and the median annualized rent on a two-bedroom apartment, condominium, or townhouse in the country’s 50 most populous cities. According to the index, the cost of buying was less than renting in 37 of the 50 cities (74 percent) as of July 1, 2011. About the same share, 78 percent, favored buying over renting in Trulia’s last index report, released in April.

Trulia defines total costs of home ownership to include “mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase, and ongoing (homeowners association) dues and private mortgage insurance, where applicable. It also includes an offset for the tax advantages of home ownership, including mortgage interest, property tax, and closing cost deductions.”

“Many aspiring homeowners are on the fence about renting and buying in today’s market. Should they take advantage of falling home prices and low borrowing costs, or should they continue to rent until the economy stabilizes?” said Ken Shuman, spokesman for Trulia, in a statement.

A price-to-rent ratio of 1 to 15 means that it’s much cheaper to buy than to rent in a particular city. Las Vegas, Detroit, and Mesa, Arizona most favored buying among major cities.

Top 10 cities to buy vs. rent:

Rank City State Price-to-rent ratio
1 Las Vegas Nev. 6
2 Detroit Mich. 7
3 Mesa Ariz. 7
4 Fresno Calif. 7
5 Arlington Texas 8
6 Sacramento Calif. 8
7 Phoenix Ariz. 8
8 Jacksonville Fla. 8
9 San Antonio Texas 10
10 Tulsa Okla. 11

Source: Trulia

 

Rent vs. Buy Index – July 2011

America’s Largest 50 Cities by Population

Rank

City

State

Price:Rent Ratio

 

Much Less Expensive to Buy Than to Rent (Ratios 1-15)

 

1

 

Las Vegas

 

NV

 

6

 

2

 

Detroit

 

MI

 

7

 

3

 

Mesa

 

AZ

 

7

 

4

 

Fresno

 

CA

 

7

 

5

 

Arlington

 

TX

 

8

 

6

 

Sacramento

 

CA

 

8

 

7

 

Phoenix

 

AZ

 

8

 

8

 

Jacksonville

 

FL

 

8

 

9

 

San Antonio

 

TX

 

10

 

10

 

Tulsa

 

OK

 

11

 

11

 

Baltimore

 

MD

 

11

 

12

 

Indianapolis

 

IN

 

12

 

13

 

Dallas

 

TX

 

12

 

14

 

Philadelphia

 

PA

 

12

 

15

 

Long Beach

 

CA

 

12

 

16

 

Houston

 

TX

 

12

 

17

 

Tucson

 

AZ

 

13

 

18

 

Charlotte

 

NC

 

13

 

19

 

El Paso

 

TX

 

13

 

20

 

Miami

 

FL

 

13

 

21

 

Virginia Beach

 

VA

 

14

 

22

 

Milwaukee

 

WI

 

14

 

23

 

Atlanta

 

GA

 

14

 

24

 

Nashville

 

TN

 

14

 

25

 

Honolulu

 

HI

 

14

 

26

 

Columbus

 

OH

 

14

 

27

 

Raleigh

 

NC

 

14

 

28

 

Cleveland

 

OH

 

14

 

29

 

Louisville

 

KY

 

14

 

30

 

Minneapolis

 

MN

 

14

 

31

 

Denver

 

CO

 

14

 

32

 

Washington

 

DC

 

14

 

33

 

Colorado Springs

 

CO

 

15

 

34

 

Chicago

 

IL

 

15

 

35

 

San Diego

 

CA

 

15

 

36

 

Albuquerque

 

NM

 

15

 

37

 

Oklahoma City

 

OK

 

15

 

Less Expensive to Rent, But May Make More Financial Sense to Buy (Ratios 16-20)

 

38

 

Oakland

 

CA

 

16

 

39

 

Austin

 

TX

 

16

 

40

 

San Jose

 

CA

 

16

 

41

 

Memphis

 

TN

 

17

 

42

 

Boston

 

MA

 

18

 

43

 

Los Angeles

 

CA

 

19

 

44

 

Portland

 

OR

 

20

 

Total Cost of Homeownership Much Greater Than Renting (Ratios 21+)

 

45

 

Kansas City

 

MO

 

22

 

46

 

San Francisco

 

CA

 

24

 

47

 

Seattle

 

WA

 

24

 

48

 

Omaha

 

NE

 

27

 

49

 

Fort Worth

 

TX

 

32

 

50

 

New York

 

NY

 

36

 

This article was taken from Inman news and published by Trulia. As you can see, Honolulu is ranked #25 and with a 14 price-to-rent ratio. It is below the set point of 16 price-to-rent ratio, which is where you must decide if you’re buying for pleasure or out of need.

With our prices so low compared to our peak in 05 and 06, this proves there has never been a better time to buy than now. Interest rates are at historic lows also. This presents us with the “perfect storm” for buying property in Hawaii.

Contact me for any real estate needs on Maui.                                  

Rustin  
808-281-1625  
rustin@hawaiilife.com

Comments (0) Show CommentsHide Comments (Remember)

Cool. Add your comment...

Your email address will not be published. Required fields are marked *

Leave your opinion here. Please be nice. Your Email address will be kept private, this form is secure and we never spam you.

More Articles from Hawaii Life