We all have to live somewhere, but there's always the question; should I rent? Or should I buy? A new study from the real estate website, Trulia suggests that investing in your own home could save you money on your monthly outgoings.
"Right now, [home prices] are continuing to fall in the L.A.-area," said Economist Jed Kolko. "We see that in Southern California, prices are continuing to fall even though rents are stable or rising."
In a survey of America's 100 most populated areas, 98 were found to be more favorable for would be homeowners — only San Francisco and Honolulu bucking the trend. Here in Southern California over the past year, asking prices for homes are down by 5.4 percent in Los Angeles, 3.6 percent in Orange County and just under 5 percent in Ventura County. Rental prices are up between 1 and almost 7 percent in all those areas.
While buying might technically be cheaper, there are still major differences in commitment and many hidden costs associated with owning versus renting.
"We have to remember that when you own a home, you're much more stuck. There are a lot of fixed costs with buying a home and selling a home, much more so than moving in and out of an apartment," said Chris Thornberg, principal at Beacon Economics.
Thornberg also says that many people in the rental market do not have the choice whether to rent or own. "These aren't directly comparable markets," he said. "A lot of the people in the rental market aren't in the position to make the 10 or 15 percent down payment, anyway."
Have you been on the fence when it comes to making the leap to home ownership? How has the state of the economy impacted your decision to buy or rent? Are you encouraged by this survey to buy now? If you prefer to continue renting, why?
Chris Thornberg, Principal, Beacon Economics
Jed Kolko, Chief Economist, Trulia