Trulia Reports Buying a Home in Top 100 Major Metros Is Cheaper Than Renting Despite Rising Home Prices

  Trulia Reports Buying a Home in Top 100 Major Metros Is Cheaper Than Renting
  Despite Rising Home Prices

  Don’t Have the Best Credit? Don’t Worry. Homeownership Still Beats Renting
               Even If You Can’t Get the Lowest Mortgage Rates

Business Wire

SAN FRANCISCO -- March 20, 2013

Trulia (NYSE: TRLA) today released its Winter 2013 Rent vs. Buy Report, which
provides the inside scoop on whether buying a home is more affordable than
renting in America’s 100 largest metropolitan areas. Looking at homes for sale
and for rent on Trulia between December 1, 2012, and February 28, 2013, this
study compares the average cost of renting and owning for all homes on the
market in a metro area, factoring in all cost components including transaction
costs, taxes, and opportunity costs. For the full report and methodology, see
here.

Low Mortgage Rates Keep Homeownership Affordable Nationwide

Asking home prices rose 7.0 percent year-over-year (Y-o-Y) nationally in
February, outpacing rents, which rose 3.2 percent Y-o-Y, according to the
Trulia Price and Rent Monitors. However, today’s low mortgage rates, at 3.5
percent at the end of February^1, have kept the cost of homeownership from
rising much. In fact, buying a home is 44 percent cheaper than renting
nationwide – down just slightly from 46 percent in 2012. Even in each of the
100 largest metros, buying is more affordable than renting, though how much
more affordable homeownership is ranges significantly – from 70 percent
cheaper to buy than rent in Detroit, to only 19 percent cheaper in San
Francisco.

Top 5 Metros Where Buying a Home is a No-Brainer
#  U.S. Metro                        Cost of Buying vs.  Cost of Buying vs.
                                       Renting (%), 2013    Renting (%), 2012
1   Detroit, MI                        -70%                 -69%
2   Dayton, OH                         -63%                 -70%
3   Gary, IN                           -63%                 -60%
4   Cleveland, OH                      -63%                 -57%
5   Warren-Troy-Farmington Hills, MI   -63%                 -64%

Top 5 Metros Where Buying a Home is a Tougher Call
#  U.S. Metro         Cost of Buying vs.  Cost of Buying vs.
                        Renting (%), 2013    Renting (%), 2012
1   San Francisco, CA   -19%                 -35%
2   Honolulu, HI        -23%                 -26%
3   San Jose, CA        -24%                 -38%
4   New York, NY-NJ     -26%                 -26%
5   Albany, NY          -30%                 -34%

Note: Negative numbers indicate that buying costs less than renting. Trulia’s
rent vs. buy calculation assumes a 3.5% 30-year fixed-rate mortgage, 20% down,
itemizing tax deductions at the 25% bracket, and 7 years in the home.

Even If You Can’t Get the Best Mortgage Rates, Buying Still Beats Renting

With today’s low mortgage rates, homeownership is 44 percent cheaper than
renting – but only homebuyers with the best credit history will qualify for
today’s lowest mortgage rate. Getting a higher rate, though, does not mean
homeownership is completely out of reach. Even with a 5.5 percent mortgage
rate, buying a home is still cheaper than renting in almost every market. Only
in San Francisco does homeownership become slightly more expensive than
renting at the higher rate.

How Mortgage Rates Affect the Cost of Buying Relative to Renting
U.S. Metro                         3.5%      4.5%      5.5%
San Francisco, CA                  -19%      -9%       2%
New York, NY-NJ                    -26%      -17%      -9%
Orange County, CA                  -32%      -24%      -16%
San Diego, CA                      -33%      -26%      -18%
Los Angeles, CA                    -35%      -28%      -20%
Sacramento, CA                     -37%      -31%      -24%
Boston, MA                         -40%      -33%      -26%
Oakland, CA                        -40%      -34%      -26%
Washington, DC-VA-MD-WV            -41%      -35%      -28%
Portland, OR-WA                    -42%      -36%      -29%
Seattle, WA                        -42%      -36%      -30%
Miami, FL                          -43%      -38%      -32%
Riverside-San Bernardino, CA       -44%      -38%      -32%
Las Vegas, NV                      -44%      -39%      -34%
Phoenix, AZ                        -46%      -40%      -34%
Dallas, TX                         -47%      -43%      -38%
Philadelphia, PA                   -49%      -44%      -39%
Denver, CO                         -53%      -47%      -41%
Chicago, IL                        -50%      -46%      -42%
Houston, TX                        -51%      -47%      -43%
Minneapolis-St. Paul, MN-WI        -53%      -48%      -44%
Tampa-St. Petersburg, FL           -55%      -51%      -47%
Baltimore, MD                      -57%      -52%      -48%
Atlanta, GA                        -56%      -52%      -48%
St. Louis, MO-IL                   -58%      -54%      -50%

NOTE: Negative numbers indicate that buying costs less than renting. These
scenarios assume a 30-year fixed-rate mortgage, 20% down, itemizing tax
deductions at the 25% bracket, and 7 years in the home.

PRE-APPROVED QUOTES

  *“Although buying a home is still cheaper than renting, the gap is
    closing,” said Jed Kolko, Trulia’s Chief Economist. “In 2013, home prices
    should rise faster than rents, and mortgage rates are likely to rise in
    the next year as the economy improves. By next year, buying could be more
    expensive than renting in some housing markets, even for people with the
    best credit.”
  *“People who didn’t buy a home last year may have missed the bottom of the
    market, but they haven’t completely missed the boat,” said Jed Kolko,
    Trulia’s Chief Economist. “Buying remains cheaper than renting in all 100
    large metros. Even buyers who can’t get today’s lowest mortgage rates will
    still find that buying makes more financial sense than renting in nearly
    all local markets – so long as they can get a mortgage in the first
    place.”

MULTIMEDIA

  *To view an interactive map illustrating how mortgage rates, tax
    deductions, and number of years in the home can affect the rent vs. buy
    decision, click here.
  *To view a full list the rent vs. buy cost considerations for the 100
    largest U.S. metros, click here.

ABOUT TRULIA, INC.

Trulia(NYSE: TRLA) gives home buyers, sellers, owners, and renters the inside
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ask thelocal community questions.Real estate professionalsuse Trulia to
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our hyper-local advertising services, social recommendations, and
top-ratedmobile real estate apps. Trulia is headquartered in downtown San
Francisco. Trulia is a registered trademark of Trulia, Inc.

^1 Freddie Mac

Contact:

Trulia
Daisy Kong, 415-400-7391
pr@trulia.com
 
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