Guess what? It’s still less expensive to buy a house or a duplex than rent one.
Last week, Trulia released their Summer 2013 Rent vs. Buy Report, which found that nationally, in spite of rising interest rates, owning is 35 percent cheaper than renting. Last year, that number was 45 percent.
If duplex and house prices stayed the same, interest rates would have to slip into double digits– about 10.5 percent- before it made more sense to rent.
Of course, numbers vary somewhat according to where you live. In Honolulu, for example, it is 10 percent cheaper to own than rent, and interest rates would have to rise to just 5.8 percent for that not to be true. In New York, that figure is 7 percent.
Buyers in Minneapolis find buying is 42 percent more affordable than renting, down from 52 percent one year ago. Interest rates would have to top 12.5 percent for it make more sense to be a tenant.
In cities like Detroit, on the other hand, it’s 65 percent less expensive to own than rent. Interest rates would have to rise higher than credit cards– to a staggering 32.8 percent for it to make sense to rent in the Motor City.
Should lending standards relax, duplex owners and income property investors should be on the lookout for higher vacancy rates, as tenants look to not only save money, but reap the rewards of home ownership as well.