During the Housing Bubble I was tempted to buy a few times. Real estate agents, banks, and friends high on the euphoria all told me it was the time, but I baulked at the absurdly high monthly payments. Plus I enjoy not having to pay for major appliances and their repair, and I also enjoy the freedom of being able to move when and where my whim takes me. But I still wondered whether the psychological permanence of renting money from a bank (i.e. paying a mortgage on a house), rather than paying rent to a landlord, would be comforting. But every permutation of possibilities I plugged into this told me I was better off renting. And every once in a while I’d see something like this, or read an article like this.
They take into acount three metrics: “the annual change in monthly rent, the percent increase of new rental construction in 2008, and the percent difference between the area’s average monthly rental payment and the average monthly mortgage payment”.
Given these criteria Portland comes in at #6 out of 40. Rents average $772 a month, whereas the average monthly mortgage payment is $1,588.
Annual Change in Rent: 4%
New Construction: 143%
Rainy day lovers might appreciate Portland, but so will those who appreciate a bargain. Not only is rent far cheaper than buying–by more than half–there’s a 143% increase in new construction for 2008, which means prices may go even lower.