Thought it might be useful to show the effect on interest rates on the decision to rent versus purchase a home. The comparisons contain over 4000 rental housing units advertised in 2009 and over 1150 closed home transactions. Payment figure a financing of 100% of purchase price 5% interest rate for 30 years showing the principal and interest payment. Taxes and insurance are not included, yet if you factored in the tax savings versus the tax & insurance costs it’s about a wash.
The following charts do not take into account the benefit of $8,000 tax credit given to you when you switch from renting to buying. yet if want to compute that affect, it tilts the advantage to buying by another $22.22 per month over thirty years so average sales price you have only $16 more a month to own the averages sales price in billings as opposed to renting the average asking price home for rent.
Now when you look at the median sales priced home in billings and think your better off renting your calculator is not working at all. it only costs $9 more a month to rent the median priced home as opposed to purchasing it. When you factor in the $8,000 credit over thirty years it cost $31 more a month to rent than it does to buy.