Monday, July 7, 2014

This NY Times Interactive Compares Renting vs. Buying a Home

A few years ago The New York Times produced an interactive infographic about the costs of renting a home compared to buying the same home. The infographic was recently updated to include more variables. Some of the updated variables include mortgage rates, closing costs, and tax status.

Users of the interactive infographic can enter variable data such as home price, interest rates, rent prices, rental rate increases, and housing market changes to determine when it's best to buy a home rather than rent. Users can also account for information like insurance rates, condo fees, and opportunity costs.

Applications for Education
The big variable in this interactive infographic is the piece that says "if you can rent a similar home for less than.... then renting is better." The challenge then is to find a home to rent at the same monthly cost. Ask students to go on a real estate website to see if it is possible to find similar homes to rent and buy at the same monthly cost. Then ask them to justify if it is better to rent or buy their towns or regions.

The other pieces of this infographic that I like are the glossary and the break-down of the "hidden" costs of home ownership. Students often don't account for hidden costs in determining how much a decision costs in the long run.