Think It's Cheaper to Rent Than Buy? Think Again!

There’s been a bit of buzz in the news lately asking if it’s cheaper to buy a house than to rent a house in today’s real estate market.

I ran the numbers on specific and current listings in our Clark County market to answer that question. These specific scenarios are based on FHA financing, 640+ credit score, with 3.5% down at 4.50% 30 year fixed rates. I ran monthly rent payments of $800, $1,000, $1,200 and $1,400. I think you’ll be pleasantly surprised with the data!

If you pay monthly rent of $800 per month… Then you could afford to purchase a home at $115,000 with $4,000 down payment. P&I $567.87, Taxes 125.00, Homeowners Insurance 30.00, Mortgage Insurance 82.00, Association Dues 0.00. Estimated Monthly Payment: $804.87

If you pay monthly rent of $1,000 per month… Then you could afford to purchase a home at $145,000 with $5,000 down payment. P&I $716.07, Taxes 140.00, Homeowners Insurance 30.00, Mortgage Insurance 104.00, Association Dues 0.00. Estimated Monthly Payment: $990.07

If you pay monthly rent of $1,200 per month… Then you could afford to purchase a home at $175,000 with $6,100 down payment. P&I $864.22, Taxes 175.00, Homeowners Insurance 30.00, Mortgage Insurance 127.00, Association Dues 0.00. Estimated Monthly Payment: $1,196.22

If you pay monthly rent of $1,400 per month… Then you could afford to purchase a home at $200,000 with $7,000 down payment. P&I $987.68 Taxes 210.00 Homeowners Insurance 40.00 Mortgage Insurance 145.00 Association Dues 0.00. Estimated Monthly Payment: $1,382.68

Information courtesy of Steve Valenta at Pinnacle Mortgage Planning.