Buy — Don't Rent — in These 31 Cities
Owning your own home is a big part of the American dream. If you’re renting, you may think that the cost of homeownership is beyond your reach. But GOBankingRates surveyed major cities across the country and found 31 of them where it’s actually less expensive to own a home than it is to rent. Is your city one of them?
GOBankingRates calculated the average cost of a mortgage — using the median price of a home, a 20% down payment, a 30-year fixed mortgage at 3.82%, local property taxes and homeowner’s insurance — and compared it with the average rent in the same city. The average monthly rent in the U.S. is $1,477, and the average mortgage payment is $1,504. But there are cities all over the U.S. where it’s cheaper to buy than to rent — even in California.
31. Colorado Springs, Colorado
Monthly rent: $1,551
Monthly mortgage payment: $1,545
Colorado Springs has the lowest property tax rate of any city on the list at 0.52%, which contributes to the $6 difference between renting and owning. And while $6 a month may not seem like a lot, it adds up to $2,160 over the course of a 30-year mortgage. Plus, you’ve got a paid-off home when all is said and done.
30. Phoenix
Monthly rent: $1,392
Monthly mortgage payment: $1,383
Homeowners in Phoenix pay an average of $9 per month less than renters. Phoenix has a median home list price of $285,000, slightly less than the nationwide average of $289,900. If you’re thinking of moving to Phoenix, though, don’t put it off – Realtor.com ranked it the fifth-hottest housing market in 2019 due to reasonable prices and warm weather.
29. Arlington, Texas
Monthly rent: $1,555
Monthly mortgage payment: $1,545
The difference between owning and renting in Arlington is just $10 but it would be more if not for the third-highest property tax rate at 2.32%. Word is getting out that you should buy versus rent in Arlington, with 69% of residents being homeowners, according to Trulia.
28. Stockton, California
Monthly rent: $1,569
Monthly mortgage payment: $1,547
Stockton homeowners pay $22 less per month than renters, which may not seem like a big difference. But that difference averages out to $264 per year or $7,920 over the course of a 30-year mortgage. Stockton is 60 miles east of the San Francisco Bay area, near enough to be accessible but far enough to be affordable with a median listing of $308,950.
27. Greensboro, North Carolina
Monthly rent: $1,116
Monthly mortgage payment: $1,080
In Greensboro, there’s a $36 difference between the average monthly rent and the average monthly mortgage payment. You’ll need a car if you’re going to live here, though – 97% of Greensboro residents commute to work by car.
26. Virginia Beach, Virginia
Monthly rent: $1,582
Monthly mortgage payment: $1,538
Homeowners can save an average of $44 per month over renters in Virginia Beach, and the word seems to have gotten around. Seventy-six percent of Virginia Beach residents are homeowners, according to Trulia. The median home listing price of $315,000 is on the high side, but so are the rent payments.
25. Columbus, Ohio
Monthly rent: $1,204
Monthly mortgage payment: $1,158
Columbus, Ohio, charges the fifth-highest property tax rate of any city on this list at 2.03%. Even so, the average mortgage payment is still $46 less than the average rent. With a median home listing price of $189,900, Columbus is in the middle of the pack in terms of housing costs. It’s one of three cities in Ohio on this list.
24. Anaheim, California
Monthly rent: $2,817
Monthly mortgage payment: $2,761
Anaheim has the highest average rent and the highest average mortgage payment of any city on this list. Not surprisingly, it also has the highest median home price at $608,444. Yet homeowners still pay an average of $56 less per month than renters. On the bright side, Anaheim is tied for the third-lowest property tax rate at 0.72% with Santa Ana.
23. Mesa, Arizona
Monthly rent: $1,417
Monthly mortgage payment: $1,360
Located just 20 miles from Phoenix, Mesa enjoys the same sunny, dry climate, with summer temperatures exceeding 100 degrees Fahrenheit and just two or three rainy days per month. Mesa homeowners pay $57 less per month on average than renters.
Don’t Miss: Climate Change Is Hurting Home Values in These Cities
22. St. Louis
Monthly rent: $932
Monthly mortgage payment: $866
In St. Louis, renters pay the fourth-lowest average amount of any city on the list, and homeowners pay the fifth-lowest average mortgage payment. St. Louis has an average home listing price of $159,900. There’s a $66 difference between the average rent and the average mortgage payment.
21. Philadelphia
Monthly rent: $1,260
Monthly mortgage payment: $1,192
One of just two cities in the northeast on this list – Buffalo, New York, is the other – Philadelphia has a median home listing price of $235,000, placing it in the middle of the pack. The average homeowner in Philadelphia pay $68 less each month than the average renter.
20. Albuquerque, New Mexico
Monthly rent: $1,240
Monthly mortgage payment: $1,171
There’s a $69 difference between the average monthly mortgage payment and the average month rent in Albuquerque. A lot of people are taking advantage of this differential – 72% of Albuquerqueans are homeowners.
19. Oklahoma City
Monthly rent: $1,084
Monthly mortgage payment: $1,006
In the capital of the Sooner State, homeowners save $78 per month on average compared to renters. The average home listing price in Oklahoma City is $189,900, which is affordable compared to most of the cities on this list. You’ll need to save $37,980 if you want to put 20% down on the average home.
18. Sacramento, California
Monthly rent: $1,706
Monthly mortgage payment: $1,622
If you own a home in the capital of the Golden State, you’ll pay an average of $84 less per month than someone who rents. And with an average home listing price of $330,000, Sacramento boasts some of the more reasonably priced houses in California, especially in the cities on this list.
17. Chula Vista, California
Monthly rent: $2,566
Monthly mortgage payment: $2,475
Chula Vista renters pay the third-highest rent of any city on the list, but homeowners here also have the third-highest median home listing price of $535,000. The difference between buying and renting here averages $91 a month. The property tax rate is the fifth-lowest of any city on this list at just 0.78%. Chula Vista is located in beautiful San Diego County and features coastline, canyons and mountains in its varied landscape.
16. Corpus Christi, Texas
Monthly rent: $1,372
Monthly mortgage payment: $1,277
Corpus Christi is a port city on the Gulf of Mexico, sheltered from the gulf by the Mustang and Padre islands. The active shipping port, resorts and the Naval Air Station Corpus Christi contribute to the local economy. Homeowners in Corpus Christi pay an average of $95 per month more for housing than renters.
15. Anchorage, Alaska
Monthly rent: $1,817
Monthly mortgage payment: $1,708
Homeowners pay $109 less per month on average for housing than renters, even though Anchorage has the fifth-highest average mortgage payment. If your plan is to move to Anchorage to buy a home, make sure you have a job lined up or the resources to live on while you look for one. The state of Alaska Department of Labor and Workforce Development cautions people against moving to Alaska without sufficient cash to live on while they search for work.
14. Jacksonville, Florida
Monthly rent: $1,259
Monthly mortgage payment: $1,137
Jacksonville is the largest city in the Sunshine State by population and the only city in Florida on this list. Jacksonville lies on the Atlantic Ocean and the St. Johns River runs through the middle of it, providing plenty of waterfront for tourism and recreation. The median home listing price in Jacksonville is $219,000, and homeowners pay an average of $122 less per month than renters.
13. Norfolk, Virginia
Monthly rent: $1,292
Monthly mortgage payment: $1,142
The median listing price for a home in Norfolk is $220,000, which puts it right in the middle of the cities on this list. If you are paying a mortgage in Norfolk, you’re paying about $150 less per month than you would if you were renting.
12. Milwaukee
Monthly rent: $1,051
Monthly mortgage payment: $890
Milwaukee has the fifth-lowest median home listing price of any city on the list at $129,900, but it also has the second-highest property tax at 2.56%. Regardless, you’ll still pay an average of $161 a month less for your housing costs if you own instead of rent in Milwaukee.
11. Columbia, South Carolina
Monthly rent: $1,125
Monthly mortgage payment: $963
You can save $162 a month by buying a home in Columbia rather than renting. With a median home listing price of $189,900, you’ll need $37,980 for a down payment – less than you would in most of the cities in this study. Home sales in Columbia are slower this year than last, which may make it a good time to buy.
10. Buffalo, New York
Monthly rent: $942
Monthly mortgage payment: $776
In Buffalo, you’ll spend an average of $166 less per month if you’re paying a mortgage rather than rent. This is despite the fact that the city has the highest property tax of any on this list at 2.72%, as well as the fifth-lowest rent. Buffalo homebuyers enjoy the fourth-lowest median home listing price on the list at $108,000, which results in the fourth-lowest average mortgage payment.
9. Silver Spring, Maryland
Monthly rent: $2,236
Monthly mortgage payment: $2,047
A suburb of Washington, D.C., Silver Spring has the fourth-highest rent of any city on this list. It also has the fourth-highest median home price at $425,000 and the fourth-highest average mortgage payment. Nevertheless, it still costs an average of $189 more to rent in Silver Spring than it would to buy.
8. Indianapolis
Monthly rent: $1,139
Monthly mortgage payment: $943
Homeowners in Indianapolis can save $196 a month on average compared to renters. But the Indiana Business Review expects housing inventory to remain low in 2019, and a potential rise in interest rates could increase the average mortgage payment. But for now, Indianapolis is still a bargain for buyers.
7. Memphis, Tennessee
Monthly rent: $855
Monthly mortgage payment: $652
Even though Memphis has the second-lowest average monthly rent of any city on the list, you’ll still pay $203 a month more to rent than to buy. With the third-lowest median home listing price at just $105,000, Memphis is a bargain for homeowners.
6. Aurora, Colorado
Monthly rent: $1,910
Monthly mortgage payment: $1,706
Aurora has the fifth-highest rent of any city on this list, and the average monthly rent is $204 higher than the average monthly mortgage. The city has the fifth-highest median home price at $365,000, but thanks to its property tax rate of 0.70% — the second-lowest of any city on the list — it doesn’t crack the top five highest mortgage payments.
5. Toledo, Ohio
Monthly rent: $795
Monthly mortgage payment: $583
Toledo has the lowest average rent of any city here, but even with cheap rent, you’re better off buying. The city also has the second-lowest average mortgage payment, and it’s $212 less than the average monthly rent. You can find cheap homes in Toledo — this city has the second-lowest median home price at $84,900.
4. St. Paul, Minnesota
Monthly rent: $1,494
Monthly mortgage payment: $1,268
In St. Paul, homeowners pay $226 less than renters on average. St. Paul is particularly attractive to younger buyers, as the median age is 33, and 40% of residents are single, according to Trulia. Fifty-nine percent of St. Paul residents are homeowners.
3. Santa Ana, California
Monthly rent: $2,731
Monthly mortgage payment: $2,484
Even with the second-highest median home price, at $544,444, and the second-highest mortgage payment of any city on the list, you’ll still save $247 per month by owning in Santa Ana. This city has the second-highest rent, but, on the plus side, is tied with Anaheim for the third-lowest property tax rate of 0.72%.
2. Cleveland
Monthly rent: $857
Monthly mortgage payment: $579
Cleveland has the third-lowest average rent, but the lowest mortgage payment of any city on the list. The average mortgage is $278 less per month than the average rent. Cleveland also has the lowest median home price at $79,900, which means you’ll need just $15,980 for a down payment. It does, however, have the fourth-highest property tax rate at 2.30%.
1. Baltimore
Monthly rent: $1,286
Monthly mortgage payment: $978
In Baltimore, you will save an average of $308 per month if you buy a home rather than renting. That works out to a savings of $3,696 per year, and $110,880 over the course of a 30-year mortgage. It’s well worthwhile to buy rather than rent in Baltimore.
Click through to find out what your home is really worth.
More on Homes and Saving Money
You’d Be Rich If You Bought a Home Here 20 Years Ago, Study Finds
5 Home-Buying Mistakes I Never Knew Before Becoming a Realtor
Methodology: GOBankingRates determined the cost of renting versus owning a home in the 85 largest cities in the U.S. by comparing monthly median rental prices — sourced from Zillow’s April 2019 rental index for all homes — and monthly mortgage price — based on the median listing price in every city, sourced from Zillow’s April 2019 home price index, a 20% down payment, local property taxes, a home insurance and a 30-year fixed-rate loan, which as of June 13, 2019, has an average rate of 3.82%, according to Freddie Mac. Cities were ranked in order from the best to the worst, the best cities have the largest amount of money saved by paying a mortgage vs. paying rent.
This article originally appeared on GOBankingRates.com: 31 Cities Where It’s Cheaper to Buy a Home Than Rent
