Rent vs Buy? The Definitive Interactive Guide

With the only debate consuming the broader investing public these days (and for the past several years) being whether or not entity/bank/country X will receive a taxpayer bailout or not, some forget that there are actual fundamental, cash flow-based drivers to making economic decisions. Key among these has always been whether to rent or buy that most capital intensive purchase (for most): a residence. Courtesy of Trulia we bring you the definitive interactive guide on whether it is currently cheaper to buy or rent in various metro areas around the country. It is immediately evident that real estate in New York continues to be massively overpriced, with the option to rent the only economical one, although that will surely not prevent this year's batch of Wall Street bonus heroes from purchasing multi-million Soho lofts, especially if the Chairman decides to lend a helping hand. How about everywhere else? "Trulia looked at housing prices, foreclosure activity and job opportunities, and found that it’s cheaper to buy a home than to rent in 74% of America’s 50 largest cities." This probably means that the days of rent-based inflation are numbered as at some point the rental herd will once again resume buying. Of course, for that to happen, the Fed will have to give an indication that the current ZIRP "blue light special" well eventually end and thus inspire a sense of urgency within the consumer class. Too bad that the Fed just made sure virtually no bidside interest will exist for at least two more years, or until the previously given mid-2013 target. As such, we expect renting to continue being the dominant form of real estate procurement, which just like the farming bubble, will soon make even living in a 300 sq foot box in Midtown impossible for most.

Fully interactive chart after the jump

Comments

[Tapeworm]

Why is there such a huge difference between Dallas and Ft. Worth?

 This doesn't smell like it is very objective.

[laosuwan]

the rental herd will not resume buying in those cities when you compare the average sale price of a house to the average income earned by a worker. prices need to fall a lot more for americans to buy with their dollars and salaries.

now, foreigners, on the other hand...

[FreudianSlip]

Ok guys... AnAnonymous isn't Asian....an Asian would say "black", not "negro".  AnAnon must be Middle Eastern...only a 3rd world Islamic would use the word "negro"........they're still using English books from the 1930s in their "schools" (yeah, schools of FISH studying the Koran and old old English text books)....guy prob has a Masters Degree from Oman and thinks he's a rocket scientist while denegrading western civilization.

[sherryw]

.

[WorkOutWellForAll]

I hate fucking landlords. Parasite!

Fucking way to get ahead is to enslave someone else. Fuck off.

[Rentier]

Don't see it...

For one many that rent can't get loan to buy even if they wanted to.  Part of it is because banks are not loaning and other part is the renter can't come up with enough down payment scratch to even get the bank to look at them.