To rent or own? That is the question. Whether it’s nobler in the mind to suffer the slings and arrows of outrageous mortgage payments, or take arms against a yearly rental agreement and not worry that your lease states you can’t put a grill on your balcony. Not all properties are created equal and neither are the cities they occupy. Renting or buying may be the right choice, depending on your location. Here are the best cities to buy or rent a home.
According to a report by TheStreet.com, owning a home is actually more affordable than renting in many circumstances. These circumstances depend heavily on the median home price and are often in the middle of the country, or more rural areas.
Depending upon where you live, that statement either has you nodding your head as if to say “of course,” or shaking your head wondering what planet the person who wrote that is living on.
Is Owning Really More Affordable?
Sure, buying a home requires a larger upfront cost than renting; and of course there are other costs associated with home ownership. However, the cost of home ownership varies greatly depending on where you live. Determining which are the best cities to buy or rent a home has a lot to do with location!
For example, the median home price in Manhattan, New York is a cool $1.3 million.
In Manhattan, Illinois the median home price is $246,000. Meaning you can buy 5 homes in Manhattan, Illinois for what one home in Manhattan, New York will cost you.
Still, the median home price in the United States is even lower at $188,000. This means that the median price of a home in Manhattan, New York is nearly 7x higher than the national median.
Of course, it is important to remember that the median cost is NOT the “average” cost. Median means the mid-point. So if the median price nationwide is $188,000 then there are plenty of homes priced lower (and higher) than that.
It may seem crazy to some, but there are plenty of real estate markets across the country where homes can be purchased for $100,000 and in some cases, far less! When you take that into consideration, buying a home can be more affordable than renting one.
What About Renting?
Renting a home provides the joy, space, and comfort of home ownership without many of the associated extra costs. Buying a home is also a long-term investment, whereas renting means you can pick up and move with relative ease and not worry about being locked into a 30-year mortgage with a ton left to pay off!
The Best Cities to Buy or Rent a Home
In some US cities where home prices are particularly high, it can make more sense to rent a home than purchase one. California, for example, has seen home prices explode over the last few years.
In major cities such as Los Angeles, San Francisco, San Jose, and San Diego; it’s far more expensive to buy a home. San Francisco was the worst offender, where it’s 42.5% more expensive to BUY a home than rent one.
On the other side, if you’re looking to buy but don’t want to live in the countryside, fear not. There are more than a few major cities where buying a home makes more sense than renting one.
- Miami / Ft. Lauderdale, Florida – 10.9% less to buy than rent
- Detroit, Michigan – 7.1% less to buy than rent
- Chicago, Illinois – 5.6% less to buy than rent
- Philadelphia, Pennsylvania – 5% less to buy than rent
- Tampa / St. Petersburg, Florida – 4.6% less to buy than rent
- Houston, Texas – 2.5% less expensive to buy than rent
- San Antonio, Texas – 2.3% less expensive to buy than rent
The best cities to buy or rent a home will vary based on location. In turn, this has an impact on the price of housing in general. Of course, your future plans play a major role in deciding which is best for you as well.
Buying a home is seen as a long-term commitment. With the average mortgage length being 30 years, it’s safe to say that buying a home means you’re putting down roots in the area.
Where Will You Put Down Roots?
No matter where you live, or whether you plan on buying or renting, either expense will contribute to your cost of living. If it’s Manhattan, New York or Manhattan, Illinois; your cost of living will vary, and for reasons beyond the price of buying or renting a home.
That’s where City vs City comes in. Our powerful cost of living calculator uses zip-code level data to determine the true cost of living in your city. By examining such factors as your after-tax income, housing expenses, transportation costs, state and local taxes, and more; City vs. City allows you to compare the cost of living between cities to see which one has a lower cost associated with it.
Check out the YouTube video below for a demonstration:
If the above list of best cities to buy or rent a home in the United States has you thinking of moving out (or putting down roots), download City vs City and start comparing your costs. Who knows, maybe Manhattan, Illinois is lovely this time of year?