Mortgage rates are on the rise, but assuming buyers plan to live in their next home for at least seven years and they itemize their income tax deductions, it’s still cheaper to buy than to rent, according to Trulia.
Actually, Trulia says, rates can rise to as high as 10.5 percent on a 30-year fixed-rate mortgage (and a 20 percent down payment) before it’s more affordable to rent than to buy.
Some places, however, have higher (and lower) rate thresholds. In San Jose, Calif., and San Francisco, for example, the percentage points at which the affordability meter tips toward renting stand at 5.2 percent and 5.4 percent, respectively, which lead the nation, according to Trulia. On the other end of the spectrum, Detroit, Mich., and Memphis, Tenn.-Miss.-Ark., rates can rise to as high as 35.8 percent and 21 percent, respectively, before it’s cheaper to rent than buy.