If you have ever been a renter in Los Angeles then you know that rent prices are sky high. Home prices in Los Angeles have always been high and have gotten higher recently, but with both renting and buying being expensive it is hard to know what the smartest financial move is. According to Truila, if you have the cash for the down payment, it is cheaper to buy than to rent.
A recent report found that buying in Los Angeles is about 32.7 percent less expensive than renting. This comes from the analyzing the rising rental prices and taking into account the many tax benefits that home ownership provides.
The 32.7 percent savings figure provides enough of a cushion that buying would still be cheaper unless home prices jump 52 percent or mortgage rates increase to 7.4 percent (neither a likely possibility). The only reason why renting is so popular in Los Angeles is because it is hard to come up with a 20% down payment in regards to the home prices here in Los Angeles. The cost of living (gas, groceries, entertainment etc..) is also very high. All of this combined makes it nearly impossible to save as a first time home buyer.
If you are finding it hard to come up with a large down payment there are programs that allow first time home buyers and those who haven't purchased a home in a while to qualify for a lower down payment. Simply ask your mortgage banker about your options.
So the great debate has been ended: Buying wins!