MarketWatch’s Quentin Fottrell recently offered some advice to millennials: purchase a home if you’re financially able.
Citing data from Trulia, Fottrell makes the case that there are only two metro areas where renting is cheaper than buying for people ages 25 to 34: Honolulu and San Jose, “but buying is a no-brainer in 98 of 100 metro areas.”
He spoke with Sachita Kumar, a 26-year-old who recently purchased a townhouse in New Jersey with her husband after paying a 20% down payment. “We decided that we just didn’t want to pay someone rent, so we decided to own something,” Kumar said.Here's more from Fottrell:
For Americans of all ages, buying a home rather than renting is 36% cheaper nationwide, Trulia concluded. That’s the biggest difference since 2012 when it was 38% cheaper to buy than rent. For those aged between 25 and 34, it’s only 23% cheaper than renting.
One caveat for all would-be buyers: Interest rates have returned to near historic lows of 3.85%, after climbing to 4% last year, but many economists expect rates to go up again within the next 12 months. An increase of 25 to 50 basis points could push mortgage rates to a range of 4.15% to 4.4%, he says, but rates would have to nearly double to about 6.5% to equalize the buy versus rent equation for potential young adult buyers.