Trulia Report: buying still beats renting (kind of)
Trulia has issued its Winter 2014 Rent vs. Buy Report, finding that homeownership is still less expensive than renting in all of the nation’s 100 largest housing markets, though roughly one-third of that 100 are at risk of tipping in the other direction.
“Buying remains cheaper than renting across the country even after 2013’s big price rebound,” said Jed Kolko, Trulia’s chief economist. “Mortgage rates are still near historic lows, despite rising a point in the past year, and would be the envy of time travelers from the 1980s, 1990s, or 2000s. Even in markets like San Francisco where home prices are high relative to paychecks, buying costs less than renting for people who stay seven years and itemize their deductions.”
According to Trulia, mortgage rates would have to rise to 10.6% in order to make renting a more lucrative proposition, though rising home prices could also contribute to a seachange in certain markets. In this sense, the top "high-risk" markets (ones where buying is not the obvious choice over renting) would tip in favor of renting at a much lower mortgage rate — Honolulu (#1) at 5.0%, San Jose at 5.4%, San Francisco at 5.8%, Orance County at 6.8% and New York City at 7.2%.
On the flip side of that, the most stable markets for homeownership are Detroit (with a 33.8% mortgage rate tipping point);Gary, Ind; Birmingham, Ala.; Toledo, Ohio; and Kansas City.
“In many markets, the rent-versus-buy decision depends on the one factor you can’t control or perfectly predict: what happens to home prices after you buy,” added Kolko. “Sharp price appreciation could make homeownership essentially free, but price declines could mean that renting would have been the better deal in hindsight. The current home-price recovery could lull prospective buyers into thinking that future price gains are inevitable, but when doing the rent-versus-buy math, people should prepare for the worst, not just hope for the best.”
The Winter Study compared the average cost of homes for sale versus those for rent on Trulia between December 2013 and January 2014 (factoring in transaction costs, taxes, opportunity costs and more).
No comments found
KB Home rolls out ‘most environmentally ambitious home yet’
KB Home unveiled its first ZeroHouse 2.0 in Los Angeles Wednesday, part of a new, larger series of homes designed to achieve net-zero energy status and zero freshwater irrigation use (by a family of four or more).
“Driven by an industry-leading commitment to sustainability, KB Home has succeeded in building our most water- and energy-efficient ZeroHouse 2.0 to date at Dawn Creek,” said Tom DiPrima, EVP, Southern California division. “With drought conditions currently affecting every corner of California, KB Home recognizes the importance of embracing innovations like the advanced greywater recycling system demonstrated in this ZeroHouse 2.0 that leverage the technology of the future to address the problems of today.”
The ZeroHouse 2.0 (or "Double ZeroHouse") can recycle drainwater on-site and reuse it for landscaping. The model in Los Angeles is estimated to be able to conserve 150,000 gallons of water per year, compared to a typical resale home (a reduction of about 70%).
On the other hand, the ZeroHouse may be primed to give homeowners free energy bills by producing as much energy as it consumes, though KB Home is hesitant to make any bold claims in that regard.
The existing model also features a water recycling dishwasher, a greywater heat recovery system, high-efficiency air ventilation and air purification systems, and a "fuel-forward" garage with options for an EV charger and a CNG fueling station.