I was doing some number crunching because I don't feel like working today:
For the community of Lakewood, OH. A safe suburb of Cleveland with solid schools and community activities.
The average vacant house price is $122500.
The average vacant apartment rent is $524 a month.
Ignoring utilities and rent inflation or housing inflation, I found this out.
The cost of the house using a 30-year fixed mortgage (because 76% of lakewood has a mortgage) with 20% down using the cheapest rate in the city available and using the average property tax of $2186 the calculations work like this:
24500 (down payment) + 111258.56 (interest) + 98000 (loan amount) + 4043 (closing costs) = $237801.56. This is the sheer cost of the house without accounting for inflation. After 30 years of payment, no repairs are done to this, no utlilties paid on this, no home owners growth in the area.
The apartment costs look like this:
524 (monthly rent) * 12 (months) * 30 (years) = $188640 This is the sheer cost of the apartment during the same 30 year span. No cost increases, no utilities.
Right there from the bottom line you are saving $49161.56 by renting and not buying.
If you did it another way, the average mortgage for a house in Lakewood is $581.27. The average rent in Lakewood is again $524. Putting the difference in an ING account at 4.5% will yield $42739 after the 30 years. That does not roll up the costing costs either. Rolling in the closing costs at the start and saving monthly the difference, you would have $57881 at the end of 30 years.
I couldn't find any information on average utility bills for Lakewood, but the average age for a home in Lakewood is older than 70 years. Heating bills (90% of the city uses gas heating) will be high. There is also no landlord to take care of repairs when buying a house.
Something to take into account is that home price gain averages about 1.6% in Lakewood. That means the same home will be worth about $197218 at the end of 30 years.
That is a difference of $74718 from starting costs of the house value. Taking off from the bottom line of renting, that would be the house would be worth $25556.44 over renting.
So in conclusion, if you bought a house in a decent neighborhood (in northern Ohio), it would save you $25556 over the 30 years to buy a house, assuming no repairs or utility bills.
I maintain again you don't really lose that much renting.