Blog Articles, Housing Market, Market Research

LendingTree Compares Renting and Owning a Home in the Nation’s 50 Largest Metropolitan Areas by LendingTree Featured by SVN | SFRhub Advisors

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

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