Real Estate

Renting Is Usually Cheaper Than Owning, But Not Always

A new study by LendingTree found that renting is usually cheaper than owning a home, but not always. To look at how the cost of renting a home differs from owning one, the online loan marketplace analyzed Census Bureau data to compare monthly rental and housing payments for homes with and without mortgages in the 50 largest metros. The survey found that renting is cheaper than owning a home — at least until a person has paid off their mortgage.

“If you are still paying off your mortgage, renting is likely cheaper than owning in each of the nation’s 50 largest metros,” according to Jacob Channel, senior economist for LendingTree and author of the report. “On average, the difference between median gross rent and median housing costs for homes with a mortgage is $564 a month,” he said. “This is lower than in 2019, when renters paid an average of $593 less monthly than homeowners with mortgages. A combination of factors, including record-low interest rates that offset rising home prices, likely contribute to this smaller gap.”

New York, San Francisco and San Jose, California are the metros where the spread in costs between renting and owning a home with a mortgage is widest. In these metros, median monthly gross rent is an average of $1,262 less than the median monthly housing costs for a home with a mortgage. Unlike across the 50 metros, this gap widened — from $1,221 in 2019 — across the same three metros at the top, though they were ordered differently.

Orlando, Phoenix and Jacksonville, Florida are the metros where the gap between renting and owning a home with a mortgage is the narrowest. In these metros, the median gross rent costs are an average of $252 less than the median monthly housing costs for homes with a mortgage. Orlando had the narrowest gap in 2019, too.

San Jose, San Francisco and San Diego are the metros where the spread in costs between renting and owning a home without a mortgage (homes purchased with cash or homes with paid-off mortgages) is the widest. Across these three metros, the median gross rent is an average of $1,310 more each month than the median monthly housing costs for homes without a mortgage. That figure is mostly unchanged from $1,307 in 2019, when the three metros finished in the same order.

Milwaukee, Cleveland and Buffalo are the metros where the gap between renting and owning a home without a mortgage is the narrowest. In these metros, the median gross rent is an average of $319 more each month than the median cost of owning a home without a mortgage.

Products You May Like

Articles You May Like

Roughly 70% of taxpayers are eligible for IRS Free File, but only 2% used it in 2022
Florida County Map Shows Where The Income Gap Is Biggest
Stocks making the biggest moves before the bell: Apple, Alphabet, Amazon, Starbucks and more
A travel insider explains how people who hate cruising — can learn to enjoy it
Increasing Retirement Funds By Integrating Existing Retirement Fund Sources (And By Increasing Saving For Retirement)

Leave a Reply

Your email address will not be published. Required fields are marked *