Yahoo Finance Housing Price Calculator: Is It Better To Rent or Buy in 2024?
Is it better to rent or buy in 2024? The answer really depends on whether it makes financial sense long-term. It’s not always easy to tell which is the better deal, but a housing price calculator can help.
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According to Realtor.com’s February 2024 Rental Report, renting a property costs 60.1% less than owning it in all of the 50 largest U.S. metros. But this is only on a monthly basis. In some cases, buying a home may make more sense over the long run.
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Using a Financial Calculator To Compare Rent vs. Buying
Using The New York Times financial calculator, buying a $300,000 home can potentially save you $13,000 over 10 years rather than paying $1,900 in rent. If you increase the home price even slightly, then renting makes more financial sense over the same time period. If you plan to purchase a $361,000 home — which is the average home value in the U.S., according to Zillow — then buying only makes sense if rents are $2,200 or higher, and you plan to stay for 10 years. The longer you plan to stay, the more money you could potentially save by buying instead of renting in the same scenario.
Both renting and buying come with upfront costs. If you buy a home, these would be the costs you pay at closing, including the down payment and other fees. If you’re renting, upfront costs include the security deposit and a broker’s fee, if applicable.
Recurring Costs Are a Factor
There are also recurring costs, which are much more complicated for homeowners. Renters pay monthly rent and renter’s insurance, whereas homeowners have mortgage payments, community living fees, maintenance and renovation costs, property taxes and homeowners insurance. Some are tax-deductible. If you move out of your home, you receive money from the sale of the home minus closing costs and other fees, tax and the remaining principal balance left on the mortgage. Renters could see the return of their security deposit at the end of their lease if they decide to move out.
Despite the numbers, 82% of all buyers surveyed by the National Association of Realtors (NAR) continue to see homeownership as a good financial investment, especially younger millennials.
“The universal value of owning a home transcends every generation, serving as a cornerstone for both personal prosperity and community development,” said Kevin Sears, 2024 NAR president.
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This article originally appeared on GOBankingRates.com: Housing Price Calculator: Is It Better To Rent or Buy in 2024?
