Just in time for Rookie Roosts Week, Trulia released its latest Rent vs. Buy Index, crunching the numbers on where it's cheaper to rent and where it's cheaper to buy. The index analyzes asking prices for rentals and houses for sale "while also factoring other costs like taxes, insurance and maintenance, etc." An index under 15 means it's cheaper to buy in that area if you're staying in your place for at least five years; between 15 and 20, it hinges on your tax bracket and other variables. It's just a little cheaper to buy in Los Angeles, but helpfully, Trulia also breaks down the greater metro area to show which areas have the best deals for buyers. As they say: "Generally speaking, homeownership in SoCal gets pricier as you move away from the coast towards the desert, but this 'rule' is by no means set in stone. There are a couple of big exceptions: Pasadena and the San Gabriel Valley. These two real estate markets are really far from the beach, but are crazy expensive places to buy a home as compared to renting."
Trulia also broke down the rent to buy ratio by size. In LA (as most cities), it's way to cheaper to buy a studio or one-bedroom compared to renting a house of a similar size than it is to buy a three- or more bedroom house compared to renting at that size. The three-bedroom could even come close to being a better rental deal, depending on the homeseeker.
· Ain’t No Lie, It’s Cheaper to Buy, Buy, Buy [Trulia Trends]