Buy or Rent? Surprising New Numbers

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For decades, people rented apartments, condos, and even small houses in hopes that they could one day save up enough money to buy a house of their own. After all, renting has always been cheaper -- and you didn't have to worry about things like maintenance, painting, and all of the other headaches that come with being responsible for your own home.

But times have changed…

New numbers show that renting just isn't as cost-effective as buying anymore, and that's translating into some interesting real estate trends in some of America's biggest markets.

According to a recent study by Zillow that looked at more than 7,500 cities around the country, buying a home becomes more cost-effective than renting after a certain amount of time. In some markets, that time frame is only 1.6 years. In other words, after you've spent a year and a half in that rented townhouse of yours, you're actually spending more money than you would if you went out and bought one!

How is that possible?

Ever since the housing bubble burst back in 2007, people have been renting in droves. Some simply couldn't afford to buy once banks tightened up their lending standards. Others were afraid to buy a home for fear that it wouldn't be a good investment (after all, property values plummeted after the crash, and still aren't anywhere near as high as they were a few years ago).

No matter what drove people into the renters' market, one thing was clear -- with all of those extra renters, landlords could get away with charging more.

In some cities, monthly rent prices have become astronomical. In Austin, Texas, rent prices are among the fastest-growing in the country. Between 2011 and 2012, the average rent price went up 6.1% -- to $917 per month. That's considerably cheaper than the average monthly mortgage payment in Austin -- which is only $782.

And, remember, when you buy, your money is actually going TOWARDS something. Each month, you're building more and more equity in your home. Plus, the money you spend in mortgage payments is tax deductible.

Adding to the convenience? If you go with a fixed mortgage rate, your monthly payment will never change. But when you rent, your landlord can increase your rent payment every time your lease is up. From one year to the next, you may not know if you can afford to live in your current place. With the nation's rent prices higher than they've ever been, those annual increases become an even bigger concern.

OK, so buying has always provided some additional perks, assuming you can afford it. But can you really afford it?

According to the Zillow study, it may actually be a better way to spend your money -- depending on where you live.

If you live in Miami, Ft. Lauderdale, or Tampa, buying becomes more cost-effective than renting in less than two years -- even when you take taxes, down payments, appreciation, and maintenance into consideration. That's because property values there have fallen so far since the recession began.

What about other places?

According to the Zillow study, if you live in San Jose, you may want to think twice. That's because it will take 8.8 years for you to break even on your purchased home over your rented one. If you're planning on staying there for the long haul, it may be a good investment. However, if you're only planning on living there for a couple of years, you may be better off renting.

Of course, everything depends on your specific situation and the specific deals you can find. If you can find a great house at a great price, it may be worth giving up your lease! finding you the right home! Search for homes at the U.S and International, Rentals, Foreclosures, Vacation homes, Search top nationwide mortgage lenders for your lowest rate at , real estate news, money making real estate tools and lots more .

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