Originally posted by LendingTree | Tendayi Kapfidze
Finding a place to live can be challenging — and so can choosing between renting or buying a home. Each option has its advantages and disadvantages, especially in the wake of the COVID-19 pandemic, when many people are struggling to pay their monthly housing costs.
To highlight some of the key differences between renting and owning, LendingTree looked at the median monthly cost to rent and to own a home, for homeowners with and without mortgages, in the nation’s 50 largest metros. In doing so, LendingTree found that renting is usually cheaper than owning until a person has paid off their mortgage.
In addition to comparing costs, LendingTree also looked at who may be better off renting versus buying.
Key findings
- If you’re still paying off your mortgage, renting is cheaper than owning in each of the nation’s 50 largest metros. On average, renting is $607 cheaper than owning across the nation’s largest metros.
- New York, San Francisco and San Jose, Calif., are the metros where the spread in costs between renting and owning a home with a mortgage is the widest. In these three metros, it’s about $1,200 cheaper, on average, to rent versus owning a home while paying off a mortgage.
- Orlando, Fla, Tampa, Fla. and Indianapolis are the metros where the gap between renting and owning a home with a mortgage is the narrowest. In these metros, renters can save an average of $336 a month.
- San Jose, Calif., San Francisco and San Diego are the metros where the spread in costs between renting and owning a home without a mortgage (that is, a home whose mortgage is fully paid) is the widest. Owners in these three areas can save an average of $1,146 a month in housing costs.
- Providence, R.I., Milwaukee and Buffalo, N.Y. are the metros where the gap between renting and owning a home without a mortgage is the narrowest. In these metros, owners who have paid off their mortgage can save an average of $250 a month.
- There are numerous reasons why the cost of renting and buying a home can differ so drastically. These reasons depend on a variety of factors, including the types of housing available, consumers’ financial profiles, property taxes, cost of living and the local housing zoning laws.
Metros where the spread in costs between renting and owning a home with a mortgage is the widest
No. 1: New York
Median monthly gross rent: $1,391
Median monthly housing costs for homes with a mortgage: $2,731
Difference between median monthly gross rent and median monthly housings costs for homes with a mortgage: -$1,340
No. 2: San Francisco
Median monthly gross rent: $1,790
Median monthly housing costs for homes with a mortgage: $2,953
Difference between median monthly gross rent and median monthly housings costs for homes with a mortgage: -$1,163
No. 3: San Jose, Calif.
Median monthly gross rent: $2,108
Median monthly housing costs for homes with a mortgage: $3,198
Difference between median monthly gross rent and median monthly housings costs for homes with a mortgage: -$1,090
Metros where the spread in costs between renting and owning a home with a mortgage is the narrowest
No. 1: Orlando, Fla.
Median monthly gross rent: $1,161
Median monthly housing costs for homes with a mortgage: $1,457
Difference between median monthly gross rent and median monthly housings costs for homes with a mortgage: -$296
No. 2: Tampa, Fla.
Median monthly gross rent: $1,070
Median monthly housing costs for homes with a mortgage: $1,419
Difference between median monthly gross rent and median monthly housings costs for homes with a mortgage: -$349
No. 3: Indianapolis
Median monthly gross rent: $888
Median monthly housing costs for homes with a mortgage: $1,252
Difference between median monthly gross rent and median monthly housings costs for homes with a mortgage: -$364
Metros ranked by the difference between median monthly gross rent and median monthly housing costs for homes with a mortgage
Continue reading here. | Tendayi Kapfidze
