Dive Brief:
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Owning a home in a major U.S. city is 38% less expensive, on average, than renting, a new report from Trulia claimed last week.
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The gap between owning and renting ranges from 17% in favor of owning in Honolulu, to 64% in Detroit, according to the study. In California, the difference in price is small, while in the Midwest and South, it is substantial, Trulia said.
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Low mortgage interest rates and rising rents have “increased the gap between the cost of buying and the cost of renting,” Jed Kolko, Trulia’s chief economist, said.
Dive Insight:
For the tables to turn, Kolko noted, mortgage rates would have to skyrocket in some cities—by up to 29.1% in Detroit, for example. In other cities, the rates would have to rise substantially, although not as drastically. For example, The report estimates it could become less inexpensive to rent than buy in Austin if mortgage rates increased by 8.9%.