According to a new report from Trulia, Millennials are better off buying a home than renting in 98 out of 100 metro areas across the U.S. Comparing the median cost of rent against median home prices in the nation’s top housing markets, the report highlights Houston, Miami, Fort Lauderdale, Tampa and San Antonio as the top metros where buying a home beats renting. In this article, Richard Florida of CityLab.com and The Atlantic covers some of the details of the Trulia report.
Millennials have been slow to buy homes. In fact, the homeownership rate for adults under 35 remains at record lows, even though the economy has picked up and interest rates remain low.
And that’s the case even though Millennials (ages 25-34) would be better off buying than renting in all but two metros across the country, according to a new report from real-estate website Trulia. Using data for median home price and median monthly rent from the U.S. Census’ 2014 American Community Survey and their own consumer poll, Trulia finds that buying a home is 23 percent cheaper than renting for Millennials nationwide.
Buying was cheaper in 98 out of 100 of the nation’s top housing markets, even though home prices vary widely by metro. Unsurprisingly, the metros where renting beats buying – or comes close to it – are among the most expensive metros in the U.S. Of the 10 metros with the lowest rent vs. buy gap, three were located in the uber-expensive Bay Area (San Jose, San Francisco, and Oakland) and yet another three were located in Southern California (Orange County, Ventura County, and San Diego), in addition to Sacramento and New York. The only two metros where renting beats buying outright are Honolulu, Hawaii and San Jose, California – two of the most expensive places on the planet.
But the picture is very different in much of the country, especially in the South and Midwest. In Houston, for instance, buying a home is 46 percent cheaper for Millennials than renting. Buying is a much better bet than renting even in Fort Lauderdale (44 percent) and Miami (43 percent), two of the hottest vacation markets in the country that have attracted a ton of foreign investment in recent years. (These prices are driven by non-waterfront homes, which are considerably cheaper.)
