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Buy a home or rent? A new calculator can help

A New York Times interactive calculator helps you weigh which option is best for you.

By MSN Money Partner May 27, 2014 1:48PM

This post comes from Krystal Steinmetz at partner site Money Talks News.


Money Talks News at MSN MoneyWhat makes the most financial sense -- buying or renting a home?


Couple inspecting rental property notices © PhotoAlto/Eric Audras/Getty ImagesIt's a huge decision, with a number of factors to consider. The New York Times said:

In the country's most expensive places, including New York, the San Francisco Bay Area and Los Angeles, buying a home again looks like a perilous investment, based on the relationship between their prices and rents or incomes. And in a longer list of areas, including Boston, Miami and Washington, prices have risen enough that buying is no longer the bargain it looked to be a few years ago.

In an effort to help prospective renters and homebuyers analyze their options, the Times created a comprehensive new buy vs. rent calculator. The calculator factors in a number of homeownership and renting costs, as well as assumptions about how investment income and home values could potentially appreciate.


When I put in the numbers for my 2006 home purchase, the calculator suggested that if I stay in my home for just 15 years, I'd need to pay less than $1,262 a month in rent to make renting the better option. I've seen the rental options in my town. There's no way that would ever happen for a comparable home.


Let's say we run a similar scenario for a median-priced ($425,000) single-family home in Seattle. Using a 4.25 percent rate on a 30-year mortgage, the monthly rent break-even point is $1,493. According to Zillow, the median rent price in Seattle is $1,781 a month.


You can run different scenarios using the Times calculator here.


What is a better financial decision -- buying or renting -- where you live?


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