July 28, 2010

Owning a Home and Renting: Cost Spread is Narrowing

With mortgage rates at record lows and housing markets stuffed to the gills with cheap distressed properties that's led to declining home prices, the cost to own a home is sometimes cheaper than renting an apartment in many markets, according to analysts at Credit Suisse.

While a segment of the renting population continues to rent, many are looking to dip their toes in the homeownership waters. Credit Suisse said the percentage of median household income needed to pay the mortgage on a median priced home is at a 30-year low.

Low mortgage rates and property values makes homeownership more attractive than renting for many. In many markets paying for a mortgage is less expensive than renting.

Despite individual variables used in their study, Credit Suisse said its analysis illustrates that the relative cost of owning versus renting has contracted considerably in the recent credit crunch.

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Tags: mortgage rates, owning a home, renting a home

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