It's still cheaper (over seven years) to buy a home in SoCal than it is to rent one, but not as much cheaper as it was a few months ago. Trulia's just released it's latest Rent Vs. Buy Report and, at a mortgage rate of 4.8 percent (and in the 25 percent tax bracket), it's 21 percent cheaper to buy in Los Angeles than it is to rent. It's still cheaper to buy than rent, in fact, in every permutation of mortgage rate, tax bracket, and length of stay on Trulia's calculator, except for people in the 15 and 25 percent tax brackets who are staying in their places for just three years. Mortgage rates are finally headed up after ages of record lows (and prices are also increasing pretty quickly), which accounts for the drop in ownership advantage; in Los Angeles, it was 32 percent cheaper to buy a year ago and 35 percent cheaper this past winter. When mortgage rates hit 7.3 percent, it'll be cheaper to rent here than to buy. Already in expensive areas like Pasadena, the San Gabriel Valley, and the Westside, buyers only save 11 percent over renting, according to the LA Times.
· Rising Mortgage Rates Narrowing Buy vs. Rent Gap [Trulia]