Is it Really Cheaper to Own a Home than Rent One?
When it comes to deciding where you want to live, there’s a lot more to think about than just the house itself. You’ll weigh factors like your job, social life, the neighborhood vibe, and even the type of home you’re picturing yourself in. But there’s one big question that always comes up: should you buy, or should you rent?
Both buying and renting come with their own pros and cons. Renting is typically easier to qualify for and offers more flexibility. But despite what some people might assume, renting isn’t always the cheaper option. In fact, according to recent data, buying a home is still more affordable than renting in a surprising number of places across the country.
Let’s dig into the latest trends and find out when it might actually be cheaper to buy — and what other factors you’ll want to consider before making a move.
Where is it cheaper to buy than rent?
A new 2024 report from ATTOM, one of the leading providers of property data, analyzed housing costs in over 300 U.S. counties. Their findings? Buying a median-priced home is more affordable than renting a three-bedroom property in about 52% of the markets analyzed.
(ATTOM’s full 2024 Rental Affordability Report is available here).
Here’s the general trend:
- Midwest and South: Buying is often cheaper than renting, especially in suburban and rural areas where home prices haven’t spiked as sharply.
- Major cities and coastal areas: Renting tends to be more affordable because home prices are sky-high. Think places like New York City, San Francisco, and most of coastal California.
Essentially, the more affordable the land and homes are in your area, the bigger the financial advantage you’ll have when you buy instead of rent.
It’s worth noting: the ATTOM report compared typical homeownership costs (mortgage payments, property taxes, insurance) to average rents. So while buying can often win out on paper, your personal numbers could vary based on your down payment, loan terms, and whether you work with an experienced lender who can help you find the right financing options.
Hidden Benefits (and Costs) of Owning a Home
The ATTOM study focuses mostly on month-to-month costs, but the bigger picture matters, too.
When you rent, your monthly payment goes straight to your landlord. You don’t get anything back from it. When you buy a home, part of each mortgage payment builds your equity — meaning you’re investing in an asset you own.
And there’s another major factor: home price appreciation. According to the Federal Housing Finance Agency (FHFA), U.S. house prices rose by 4.5% between the fourth quarter of 2023 and the fourth quarter of 2024. This marks a slight deceleration compared to the previous year’s growth, reflecting a cooling market amid higher mortgage rates and increased inventory . Historically, home prices appreciate around 3–5% per year, but many areas are still experiencing above-average growth. That growth represents extra wealth renters simply miss out on.
However, owning does come with some additional expenses that renters usually don’t face:
- Property taxes (varies widely by location)
- Homeowner’s insurance
- HOA fees (where applicable)
- Maintenance and repairs
- Private Mortgage Insurance (PMI), if you put down less than 20% on your home
Plus, if you need to sell your home sooner than planned, you’ll have to cover transaction costs (usually 5-8% of the home’s sale price).
This is why it’s crucial to work with a licensed mortgage loan originator who can help you break down your total costs and make sure you’re financially prepared, not just today but over the next several years.
So, Is Now the Right Time to Buy?
The short answer: it depends.
If you live in a suburban or rural area — especially across the South, Midwest, or certain parts of the Northeast — buying a home could definitely save you money each month compared to renting. With rents rising across the country (up about 3.3% year-over-year according to Zillow’s latest data), locking in a fixed-rate mortgage can provide predictable monthly payments and long-term savings.
On the flip side, if you’re living in a high-cost urban market, renting could still be the more affordable short-term choice — especially if you’re not planning to stay put for more than a few years.
Other factors to consider:
- Job Stability: Are you planning to stay in the same area for at least 3-5 years?
- Savings: Do you have enough saved up for a down payment and closing costs?
- Credit Score: Can you qualify for favorable mortgage rates with your current credit?
- Lifestyle Needs: Would you rather have the flexibility to move easily or the stability of owning your own place?
In the end, buying a home isn’t just about monthly costs. It’s about building wealth, securing long-term housing stability, and investing in your future. With homeownership still being the primary way most families build wealth in America, it’s worth considering — especially if you have access to trusted advice and the right financing options.
Need help figuring out if buying is right for you?
Our team of experienced lenders and licensed mortgage loan originators is here to walk you through your options and find the path that makes the most financial sense for your situation. Whether you’re buying your first home or considering an investment property, we’re ready to help you get started.
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