Sunday, September 22, 2024

10 Cities Where Buying a Home Is Now Cheaper Than Renting

With mortgage rates falling, monthly home payments are now less expensive than rent in nearly half of the nation's largest metros, according to a new analysis. Zillow found that it's cheaper to buy than rent in 22 of the 50 largest U.S. metros, with homeowners in some cities saving over $400 a month.

Posted by LampLighter at 07:31 PM | 5 COMMENTS | permalink

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... n New Orleans, buyers can save nearly $450 a month paying a mortgage rather than renting " the best margin of any major metro.

Chicago was second on the list, where the typical mortgage payment is $1,640 per month, $434 less than rent. Pittsburgh homeowners can also save money by not renting, about $321 a month.

Nationally, the typical rent payment is $2,063 a month " $236 more than the typical monthly mortgage payment of $1,827.

Zillow's report assumed a 20% down payment, a 6.5% interest rate and a 30-year fixed-rate mortgage.

"This analysis shows homeownership may be more within reach than most renters think," said Zillow Home Loans Senior Economist Orphe Divounguy. ...


#1 | Posted by LampLighter at 2024-09-22 02:25 AM

Yeah, remembering back in the day when I bought my house, it was the down payment that caused me pause.

I saw this...

Harris Promises $25,000 Down Payment Aid for First-Generation Homebuyers
www.boundless.com

... The proposal includes $25,000 in downpayment assistance for 400,000 first-generation homebuyers, defined as those whose parents do not own a home.

To qualify, these families must have a history of paying rent on time for at least two years. Additionally, the plan offers a $10,000 tax credit for first-time homebuyers. ...


Yeah, I was fortunate when I bought my house in that my parents were able to finance the down payment.

Once that was accomplished, my monthly mortgage payment (even at the 11+% mortgage rate I was paying at the time) was $200 less per month than the rent I had been paying.


And yeah, 11+% interest on my mortgage.



#2 | Posted by LampLighter at 2024-09-22 02:33 AM

I live in one of the cities on the list. During Covid in late 2021, I purchased my 2 bdrm condo on a 30 yr mortgage at 3.3%. My mortgage started at $1061 (including homeowner's insurance and tax escrow) and after 2 1/2 years is down to $931 due to lower taxes and the removal of mortgage insurance because of rapid appreciation. My unit appraised for $100,000 more than the amount I owe after only 30 months. If I were to rent this unit, the current market price would be $2200-$2500 per month.

My daughter moved in with me in 2021 and then bought her own suburban house in the summer of 2023 since her mortgage - even at double my own rate - still left her payment hundreds less than lessor rental apartments in this market.

I hope younger people are able to take advantage of the current bifurcated markets in many cities around the country and invest in their futures by owning instead of renting.

#3 | Posted by tonyroma at 2024-09-23 08:03 AM

Some fine cities on that list, most of which offer a very good standard of living (OKC excepted).

When my daughter bought in Chicago, her monthly occupancy cost decreased from when she was a renter, and she got more room and deeded off-street parking. And an interest rate that started with a '3'. Pretty nice deal...

#4 | Posted by catdog at 2024-09-23 09:34 AM

Id be more interested if they included the real costs including taxes, utilities, and average maintenance cost that are factored into rental rates. There are a lot more costs to home ownership than the mortgage. But, on the other hand, some day you get to stop paying the mortgage not rent.

#5 | Posted by Mblue at 2024-09-23 09:53 AM

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