A new report by the real estate website Trulia found that across the nation it is 44 percent cheaper to buy a home than it is to rent one. In Fairfield County, it’s a bit cheaper still, at 45 percent, while house hunters in the New Haven metropolitan statistical area can enjoy a 47 percent break if they buy.
Of course, that bargain fluctuates depending on who you are and what you’re looking for. The Trulia team had some pretty strict guidelines for the analysis:
To compare the costs of owning and renting, we assume people will get a 3.5% mortgage rate, reside in the 25% tax bracket and itemize their federal tax deductions, and will stay in their home for seven years. We also assume buyers get a 30-year fixed-rate mortgage and put 20% down. Under all of these assumptions, buying is 44% cheaper than renting nationwide, taking into account all of the costs and proceeds from buying or renting over the entire seven-year period. We also look at alternative scenarios by changing the mortgage rate, the income tax bracket for tax deductions, and the number of years one stays in the home. Our interactive map shows how the math changes under alternative assumptions. And if you’re interested, check out our detailed methodology which explains our entire approach, step by step.
Looking for the perfect spot to claim as your own? We did a little house hunting of our own and found the most recently reduced prices on homes for sale in every town in Southwestern Connecticut. Check out the slideshow above to see what we found.