At some point, when you’re looking for a new place, you have to decide: Do you rent or do you buy? A serious conundrum! One that could end up meaning a significant chunk of cash, depending how you choose. But it’s a decision that should be based on a variety of factors--your income, how long you’re planning on sticking around, and, of course, what kind of market you’re looking in. The real estate listings site Trulia put together a tool to help answer this very question, giving you the hard numbers on renting vs. buying in 100 major metropolitan markets around the U.S.
The infographic is interactive. Plug in the estimated rate you could get for a 30-year mortgage, tell it your income tax bracket after you itemize deductions and how many years you’re anticipating to stay in your new place, and the map updates dynamically, showing you where it’ll be cheaper to buy and where it might be wiser to rent.
If you’ve got itemized deductions in the 25% tax bracket and are planning on staying in your new home for 7 years with a 3.5% mortgage, it’s cheaper to own than to rent in all 100 cities included on the map. In popular metropolises like San Francisco, New York, and L.A., owning hovers around 30% cheaper. But in areas like Toledo and Oklahoma City, it’s up to 60% cheaper to own--even up to 70% cheaper in Detroit. As you move the parameters in the other direction--some combination of higher mortgage rates, itemizing deductions in a lower tax bracket, and forecasting a shorter stay, renting becomes the cheaper option, especially in big cities like New York and San Francisco.
The map takes into consideration all the associated costs with renting and owning--security deposits and renter’s insurance for the former; closing costs, upkeep, taxes and the like for the latter. It doesn’t, however, factor in many of the unquantifiable variables that should be considered when choosing a new place, such as unhinged landlords, upstairs neighbors who listen exclusively to drum 'n’ bass, and the ability to just pack up and leave town after a bad breakup.