Is it a better financial decision to rent or buy?

Zillow has published a study based on first quarter 2018 data that estimates how many years of home ownership would be required before it becomes less expensive to own than to rent.  Here's a quick breakdown of the Bay area counties:

Here's a sample of their data:

The entire article can be found at:
https://www.zillow.com/mortgage-learning/trends/breakeven-horizon/

There are all sorts of assumptions made when doing these calculations so use with caution.  Nevertheless, if a buyer can actually purchase a home in the Bay area and if they plan on holding it for 3-4 years minimum, it's likely they will come out ahead compared to renting a similar property, according to this study.

It's worth noting that the main part of the article compares the 25 largest "metro areas".  This phrase usual means "metropolitan statistical areas" as determined by the federal government.  For some reason the San Francisco/Oakland/Fremont MSA is not included and nor is Phoenix.  But a city like Portland is included even though the city of Portland its MSA are both smaller than San Francisco.  However, if you use the interactive map on the Zillow link above it provides data by county.

Rent vs Buy?

Trulia recently published an updated report comparing costs to rent vs. buy in a number of real estate markets.

(Click on the map to embiggen).

I've highlighted the San Francisco market.  Click here to see the full Trulia article where you can play with some of the assumptions included in their calculations.  They also offer a full calculator where you can plug in numbers specific to your situation.

One of the main points of their article is to be sure to include the cost of monthly home owners association (HOA) dues.  We've noticed a significant increase in dues over the past few years and they can make a significant impact on your rent vs. buy situation.