What Cities Are Better to Buy vs. Rent? 

Are you ready to take the leap into homeownership? Owning a home is part of the American dream, but it’s not required. Experts sometimes debate if buying or renting is a better financial option. The steep entry cost to owning a home in some markets deters people from becoming homeowners. However, when you run the numbers, it makes more sense to buy than to rent in some cities and vice versa. Let's highlight a few of these cities where it is better to buy vs. rent.

 

Baltimore, Maryland

Business Insider ranked this city as a leading contender where it's cheaper to own than rent. Homeowners had an average monthly mortgage payment of $978 whereas renters paid an average of $1,286 a month.

 

Buffalo, New York

A different study by GoBankingRates found Buffalo to be affordable, with a median home value of $86,800. Buffalo also came in fifth on SmartAsset’s price-to-rent ratio list. The average monthly rent ran $942 while the average monthly mortgage payment was $776. 

 

Cleveland, Ohio

With a median home value well below the national average, renters paid an average of $857 a month. Homeowners paid an average mortgage of $579.

 

Las Vegas, Nevada

LendingTree highlighted this as a city where carrying a mortgage is more affordable than paying rent. America’s entertainment capital is growing fast and new construction homes are available in communities across Las Vegas.

 

Memphis, Tennessee

Memphis is another city within the affordable median home value. SmartAsset rated it third on its price-to-rent ratio index. Homeowners averaged a mortgage payment of $652 while renters paid $855 a month on average.

 

Miami, Florida

This Sunshine State city may not be known for its affordability, but it ranked on three lists as better to buy than rent. When you compare a median rent to median mortgage here, owning likely wins. LendingTree says the median rent runs $1,477 but an average mortgage cost $1,215. The analysis does not factor in the down payment or Miami’s median single-family house cost. 

 

Orlando, Florida

The same analysis by LendingTree reported the median monthly rent in Orlando as $1,263. The median monthly mortgage was $1,036. While a new home in Orlando can vary in terms of price, in some local communities, renting might cost double than the comparable average monthly mortgage payment, so, you are better off buying. 

 

Pittsburgh, Pennsylvania

One source found the average rent in this city was $1,250 a month. With an average home price just over $145,000, it’s cheaper to hold a mortgage than rent. It placed sixth on SmartAsset’s average rent-to-home price index.

 

Santa Ana, California

While a median home value of $552,100 might shock some first-time homebuyers, this is one city where paying a mortgage was a better value. Urban Land Institute reported the average monthly rent as $2,731. Compare that to a monthly average mortgage payment of $2,484.

 

San Antonio, Texas

With a 10-to-1 home price to rent index on Forbes, it’s better to own a new home in Texas than to rent it. New homes in San Antonio are particularly valuable as MarketWatch reports the average monthly rent for an apartment ran $1,226 while the average price of a home cost $232,000.

 

St. Paul, Minnesota

Median home values are more in line with the national average in St Paul. However, where homeowners paid $1,268 on average for their mortgage payment, renters paid an average of $1,494 a month. Urban Land Institute says the city is an increasingly popular destination for people to move, making homeownership not only a smart financial decision but a good investment. 

 

Tampa, Florida

The third Florida city on the list, the Urban Land Institute found that for 90% of Tampa's communities, renting was said to be more expensive than buying. While, like Orlando, new homes in Tampa can vary greatly in terms of price, savvy new home buyers can often find the home they are looking for with monthly payments below what they would expect to pay in rent.

First-time homebuyers wondering if buying or renting is cheaper in their area need to look at the financial big picture. Owning a home likely makes real “cents” if you plan on putting down roots.

 

Interested in starting your new home journey? Find affordable new homes built by Centex in communities across the United States or visit some of our available resources like our “Checklist for Buying a House” blog to learn more about what it will take for you to purchase your new dream home!

 

Looking for more Foundation tips and learning? Return Home here.

Published 01.20.22

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