I’ve read a lot of stories over the past year pointing out that, in several U.S. cities, it is now cheaper to buy a home than it is rent one. Because these sort of statistics are usually generated using city-wide averages, I assumed the “buying is cheaper than renting” condition was true only if you have good enough credit to obtain a mortgage at the lowest rates.
According to an infographic I found on Trulia today, my assumption was very wrong. If your credit is good enough to qualify for the lowest current 30-year fixed mortgage and you plan to stay in a house for seven years, Trulia says it’s 57 percent cheaper to buy in Atlanta right now on average than it is to rent. But even if your credit is so-so, you don’t itemize your tax deductions, and you plan on staying in a house for just three years, it’s still 23 percent cheaper to buy.
That’s a significant chunk-o-change. Why aren’t all the renters out rushing out to buy? Who wouldn’t want to save one-quarter or one-half of the money they spend on housing. I mean, think of all the Atlanta Magazine subscriptions you could buy for your friends with extra spending money!
It’s the pesky down payment. It takes more than five years for someone in Atlanta earning an average wage to save enough for an average down payment on a average house.