17 US cities where it’s cheaper to own property than rent
In some of the biggest US cities, homes may be expensive, but renting will cost you even more.
An analysis compiled by the Urban Institute this month outlines 17 major cities across the US where buying a median-priced home will consume less of that particular city’s median family income than renting property.
Topping the list is Miami, where the median home is more expensive than most other big cities in the nation. Median three-bedroom rent in Miami will cost 11% more of the median family income than house payments.
Big cities where it’s cheaper to own than rent:
- Tampa Bay
- San Antonio
- New York City
- Minneapolis-St. Paul
- Kansas City
The list above then begs the question, which big cities should you avoid buying a home in?
It seems that on the west coast of the US it’s much more affordable to rent than own property.
Where not to own?
- San Francisco
- San Jose
- San Diego
- Los Angeles
- Las Vegas
Owning the median-priced home in San Francisco will eat up around 80% of the median family’s income, while renting will only take 37% – less than half the amount.
Urban Institute’s analysis only factored in the largest metropolitan statistical areas and assumed a small 3.5% downpayment on each city’s median home at Freddie Mac’s 30-year mortgage rate. In addition to the mortgage principal and interest, calculations included 1.75% of the home’s value for property tax and home insurance.
Luckily for prospective homebuyers, real estate today is more affordable now than it was 20 years ago, but it may not remain that way for long considering the Fed’s ongoing interest rate hikes and rising home prices.
Curious as to where people are buying up homes? Here’s 10 cities where homeownership is growing fastest.
Location is always an important factor in buying a home, and so are mortgage rates and terms. If you don’t want to be be paying off your mortgage into your retirement compare your options using our mortgage guide.