10 Cities Where Buying a Home Is Now Cheaper Than Renting

Sunday, September 22, 2024

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 | Comment on This Entry |

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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 | Reply

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 | Reply

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 | Reply

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 | Reply

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 | Reply