Buying is cheaper than renting in parts of Socal

Low home prices and mortgage rates helps explain why financing a home is less expensive than renting a similar property. From the North County Times:

Buyers who put down 20 percent of the cost of a median-priced house and pay 3.9 percent interest on a 30-year conventional loan will have a lower monthly mortgage payment than the median house rent in 23 out of 34 North County ZIP codes. Some homebuyers get loans backed by the Federal Housing Administration, allowing them to make a 3.5 percent down payment, which means they pay more in monthly payments. Despite that, those homeowners are still paying less than rent in half of all North County ZIP codes. In Southwest Riverside County, homebuyers who make a 20 percent down payment to buy in 13 of 15 ZIP codes, pay less on a monthly basis than they would in rent. Even homebuyers with FHA loans still pay less in those same ZIP codes.

It's hard to generalize about renting or buying because it usually depends on the specific market. In high-priced residential areas like NY, SF and sections of L.A., it's often cheaper to rent. In more affordable locations, buying offers a better deal.