It appears that in many markets, housing continues to offer an exceptional opportunity, in fact according to current numbers home ownership is 38% cheaper than renting. But, that opportunity is rapidly evaporating as the gap between renting and buying narrows across the U.S.
• Home ownership remains cheaper than renting nationally and in all of the 100 largest metro areas.
• Rising mortgage rates and home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing.
• At a 30-year fixed rate of 4.5%, buying is 38% cheaper than renting nationally, versus being 44% cheaper one year ago.
• The math is different in each local market. Buying favor-ability ranges from being just 5% cheaper than renting in Honolulu to 66% cheaper in Detroit.
While prices have increased in many markets over the past year, low mortgage rates have kept home ownership from becoming more expensive than renting.