To rent or to own, that is the question

The $8,000 federal tax credit for first-time homebuyers expired for most of us a little over a month ago, but� mortgage rates continue to hold at historic lows prompting the question: Is it better to rent or own?

The big picture story tells us conditions are prime for buyers, but the truth is on a regional level the story has many versions. To determine if now is the best time for your unique circumstances, take a look at this Rent. vs. Buy Index produced by Trulia, a real estate website.

The index rates the Top 50 markets in the United States based on population and compares the average cost to rent a 2-bedroom apartment with the average listing price for comparable condos and townhouses. �

Miami, still reeling from the condo crash, is among the Top 3 cities where its better to purchase than rent with a price-to-rent ratio of 8. Baltimore, the District of Columbia and Virginia Beach just barely fell within the realm of purchase, with price-to-rent ratios of 12, 14 and 14, respectively.

The tipping-point, according to Trulia, is a price-to-rent ratio of 15, which may be on the low side, according to some. The Wall Street Journal offers more analysis of the Rent vs. Buy index:

First, homeowners need to look first and hardest at present cashflow. The cult of homeownership made no sense. If renting is much cheaper than buying, think seriously about it.

Second: The markets that have fallen the furthest now look like good places to buy, while those that seem to be safest arent. As the saying goes: There is no such thing as a safe investment, merely one whose risks are not yet apparent. Its a principle that a lot of people forget time and again.

Still not sure is its better to rent or buy? The New York Times recently launched its Rent. vs. Buy calculator, which accounts for down payment, taxes and closing costs as well as rent deposit, renters insurance and of course rent.

http://twlv.net/kx8qBJ