) -- Benchmark mortgage rates have risen from a record-low 3.31% average last November to nearly 4% today, but a


analysis estimates they'd have to soar to 10.5% before renting a home makes more financial sense than buying.

"Higher mortgage rates do make buying more expensive, but rates are still incredibly low compared to historic norms," Trulia Chief Economist Jed Kolko says.


recently analyzed for-sale and for-rent listings on its site to estimate how much mortgage rates would have to rise before leasing a place for seven years becomes cheaper than buying a comparable one.

The study found that even though mortgage giant

Freddie Mac

reported recently that average 30-year fixed rates have hit 3.93%, buying a place is still 41% less expensive over a seven-year period than renting.

In fact, Trulia calculated that even if mortgage rates rise to 5% -- something few market watchers expect will happen for a year or more -- buying will still cost 34% less than leasing.

"The math in the most-expensive markets starts to tip in favor of renting once mortgage rates

go above the 5% range," Kolko says. "But in most of the country, you've got to get into double digits before renting becomes cheaper than buying."

Trulia tried to estimate all expenses associated with buying and leasing by looking at list prices and asking rents on a sample of properties from around the country advertised on its site between March 1 and May 31.

Costs that the study considered ranged from estimated mortgage bills to likely property taxes.

The site also included the projected positive effects of tax breaks and price appreciation that homebuyers typically enjoy. (Trulia assumed that consumers would buy places using 30-year fixed-rate mortgages and 20% down payments, and would itemize their income taxes and pay a 25% top marginal federal tax rate.)

Kolko says buying homes under those terms costs way less right now than renting does.

And while he says rising home prices and mortgage rates could eventually close the gap, interest charges alone seem unlikely to do so because average 30-year fixed-mortgage rates haven't topped 10.5% in nearly a quarter-century.

"To have 10.5% mortgage rates, you'd have to have people terrified of inflation or terrified that the U.S. government is not going to be able to pay its (bonds)," Kolko says.

Of course, home prices and rental rates vary from city to city -- so some markets could reach a balance between buying and leasing even if mortgage rates don't go through the roof.

For instance, Trulia estimates rates would only have to hit 5.2% before buying and renting cost the same over seven years in pricey San Jose, Calif.

Conversely, the site predicts higher rates alone won't create parity between buying and leasing in struggling Detroit unless interest levels hit 35.8% -- something unlikely to ever happen.

After all, that's nearly twice late October 1981's 18.63% average mortgage rate, the highest level ever recorded in the 42 years Freddie Mac has followed the market.