New York Times raises the bar on rent vs. buy calculators

One mortgage expert says tool is 'far better' than other calculators -- including his

The New York Times has unveiled an updated rent vs. buy calculator that factors in assumptions about how home values and investment income would appreciate over time, in addition to a wide array of other homeownership and renting costs.

“The version we created in 2007 was enormously popular — and has continued to be. We’ve long wanted to update it, given its popularity,” said David Leonhardt, the managing editor of The Upshot, the Times’ data journalism site. “This new version allows readers to make many more decisions than the old one did.”

Buy vs. rent image via Shutterstock.
Buy vs. rent image via Shutterstock.

A number of rent vs. buy calculators are available to consumers, including tools offered by top real estate and rental search sites like Trulia, realtor.com and Homes.com, and sites geared to lending like Freddie Mac and Bankrate. They all generally make recommendations based on criteria like monthly rent, home price, planned length of stay, mortgage rates and property taxes.

The more sophisticated of those tools factor in taxes and ancillary costs of renting and homeownership that are sometimes overlooked. On the homeownership side, those expenses include down payment, closing costs, selling costs, maintenance costs, utilities and homeowners insurance. On the renting side, they include security deposit, broker’s fee and renters insurance (the New York Times’ rent vs. buy calculator appears to be unique in factoring in broker’s fee and security deposit).

A few try to go beyond assumptions around housing, such as estimating how much you might make by investing money in non-real estate assets rather than putting it towards a down payment. The Times’ calculator has joined this club.

Its “What does the future hold?” section asks users to enter expected home price growth, rent growth, investment return rate (the annual rate of return a person can earn on saved or invested income) and the inflation rate.

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new york times rent vs buy calculator

Screen shot of calculator’s recommendation for user considering a $256,000 home. 

“This is the best rent vs. buy calculator I have seen; it is far better than any of the others, including  mine,” said Jack Guttentag, a mortgage expert whose website offers dozens of mortgage calculators, including several geared toward helping buyers and sellers. “The clever use of graphics will be copied in the development of other calculators.”

Guttentag — who writes a syndicated column for consumers, “The Mortgage Professor” — offers a buy vs. rent calculator that helps borrowers decide whether they will be better off buying a home now with a small or no down payment, or waiting until they’ve saved up enough to make a bigger down payment.

The clean and interactive interface of the updated New York Times’ tool brings to mind Trulia’s rent vs. buy calculator. Trulia debuted the calculator last fall, which includes an “economics assumptions” section that asks for some of the same sophisticated inputs found in the Times’ tool.


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