50 Cities Where It’s Cheaper To Buy a Home Than Rent
Buying a home is often touted as a smarter financial move than renting. In the past, Americans seemed to bear this sentiment, as homeownership rates climbed year after year to reach a high of 69.2% in 2004, according to Census Bureau data. But the tide turned as the housing market started to collapse in 2007 and the U.S. economy fell into a recession. Over time, more and more people turned to renting. By 2016, the homeownership rate had fallen to 62.9%, and the percentage of renting households hit a 50-year high.
Things changed again, though, in 2017. The homeownership rate in the U.S. has been inching back up over the past two years and is now at 64.8%, according to the Census Bureau. So, if you’re renting, should you join the renewed trend toward homeownership?
To help Americans determine whether they should continue renting or take the plunge into homeownership, GOBankingRates analyzed the top 100 housing markets in the U.S. to see where you can save money in the long term by opting to buy rather than rent. The study estimated the typical monthly mortgage payment in each city by using the median list price, a 20% down payment and the current interest rate on a 30-year fixed-rate mortgage. The monthly mortgage payment was then compared to the median rent for a single-family residence, resulting in the expected savings from buying versus renting.
Note that GOBankingRates’ study doesn’t factor in the initial cost of a down payment on a home, which can take many years to save up for. The study only considers the monthly mortgage payment and rent. So, if you can get past the hurdle of a down payment, buying a home in these cities makes financial sense.
Last updated: Dec. 27, 2019
50. Pittsburgh
Median list price for a single-family residence: $219,000
Monthly rent: $1,398
20% down payment: $43,800
Monthly mortgage payment after 20% down: $1,180
Difference between rent and mortgage payment: $218
Annual savings when you buy instead of rent: $2,610
49. New Orleans
Median list price for a single-family residence: $318,000
Monthly rent: $1,600
20% down payment: $63,600
Monthly mortgage payment after 20% down: $1,380
Difference between rent and mortgage payment: $220
Annual savings when you buy instead of rent: $2,640
48. Tampa, Florida
Median list price for a single-family residence: $315,000
Monthly rent: $1,650
20% down payment: $63,000
Monthly mortgage payment after 20% down: $1,425
Difference between rent and mortgage payment: $225
Annual savings when you buy instead of rent: $2,700
47. Arlington, Texas
Median list price for a single-family residence: $260,000
Monthly rent: $1,650
20% down payment: $52,000
Monthly mortgage payment after 20% down: $1,423
Difference between rent and mortgage payment: $227
Annual savings when you buy instead of rent: $2,724
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46. Louisville, Kentucky
Median list price for a single-family residence: $205,000
Monthly rent: $1,150
20% down payment: $41,000
Monthly mortgage payment after 20% down: $912
Difference between rent and mortgage payment: $238
Annual savings when you buy instead of rent: $2,856
45. St. Louis
Median list price for a single-family residence: $159,900
Monthly rent: $975
20% down payment: $31,980
Monthly mortgage payment after 20% down: $729
Difference between rent and mortgage payment: $246
Annual savings when you buy instead of rent: $2,952
44. Baton Rouge, Louisiana
Median list price for a single-family residence: $228,500
Monthly rent: $1,200
20% down payment: $45,700
Monthly mortgage payment after 20% down: $954
Difference between rent and mortgage payment: $246
Annual savings when you buy instead of rent: $2,952
43. Knoxville, Tennessee
Median list price for a single-family residence: $242,995
Monthly rent: $1,300
20% down payment: $48,599
Monthly mortgage payment after 20% down: $1,030
Difference between rent and mortgage payment: $270
Annual savings when you buy instead of rent: $3,240
42. Tucson, Arizona
Median list price for a single-family residence: $227,500
Monthly rent: $1,300
20% down payment: $45,500
Monthly mortgage payment after 20% down: $1,029
Difference between rent and mortgage payment: $271
Annual savings when you buy instead of rent: $3,252
41. Anaheim, California
Median list price for a single-family residence: $619,000
Monthly rent: $2,900
20% down payment: $123,800
Monthly mortgage payment after 20% down: $2,624
Difference between rent and mortgage payment: $276
Annual savings when you buy instead of rent: $3,312
40. Greensboro, North Carolina
Median list price for a single-family residence: $207,000
Monthly rent: $1,225
20% down payment: $41,400
Monthly mortgage payment after 20% down: $948
Difference between rent and mortgage payment: $277
Annual savings when you buy instead of rent: $3,324
39. Chandler, Arizona
Median list price for a single-family residence: $349,900
Monthly rent: $1,750
20% down payment: $69,980
Monthly mortgage payment after 20% down: $1,472
Difference between rent and mortgage payment: $278
Annual savings when you buy instead of rent: $3,336
38. Nashville, Tennessee
Median list price for a single-family residence: $326,000
Monthly rent: $1,725
20% down payment: $65,200
Monthly mortgage payment after 20% down: $1,445
Difference between rent and mortgage payment: $280
Annual savings when you buy instead of rent: $3,360
37. Colorado Springs, Colorado
Median list price for a single-family residence: $335,000
Monthly rent: $1,650
20% down payment: $67,000
Monthly mortgage payment after 20% down: $1,367
Difference between rent and mortgage payment: $283
Annual savings when you buy instead of rent: $3,396
36. Anchorage, Alaska
Median list price for a single-family residence: $317,500
Monthly rent: $1,800
20% down payment: $63,500
Monthly mortgage payment after 20% down: $1,515
Difference between rent and mortgage payment: $285
Annual savings when you buy instead of rent: $3,420
35. Albuquerque, New Mexico
Median list price for a single-family residence: $230,995
Monthly rent: $1,350
20% down payment: $46,199
Monthly mortgage payment after 20% down: $1,045
Difference between rent and mortgage payment: $305
Annual savings when you buy instead of rent: $3,660
34. Indianapolis
Median list price for a single-family residence: $174,900
Monthly rent: $1,108
20% down payment: $34,980
Monthly mortgage payment after 20% down: $795
Difference between rent and mortgage payment: $313
Annual savings when you buy instead of rent: $3,750
33. San Bernardino, California
Median list price for a single-family residence: $305,000
Monthly rent: $1,650
20% down payment: $61,000
Monthly mortgage payment after 20% down: $1,331
Difference between rent and mortgage payment: $319
Annual savings when you buy instead of rent: $3,828
32. Las Vegas
Median list price for a single-family residence: $299,999
Monthly rent: $1,599
20% down payment: $60,000
Monthly mortgage payment after 20% down: $1,279
Difference between rent and mortgage payment: $320
Annual savings when you buy instead of rent: $3,840
31. Miami
Median list price for a single-family residence: $479,000
Monthly rent: $2,500
20% down payment: $95,800
Monthly mortgage payment after 20% down: $2,175
Difference between rent and mortgage payment: $325
Annual savings when you buy instead of rent: $3,900
30. Toledo, Ohio
Median list price for a single-family residence: $88,250
Monthly rent: $797
20% down payment: $17,650
Monthly mortgage payment after 20% down: $470
Difference between rent and mortgage payment: $327
Annual savings when you buy instead of rent: $3,924
29. Los Angeles
Median list price for a single-family residence: $850,000
Monthly rent: $4,000
20% down payment: $170,000
Monthly mortgage payment after 20% down: $3,661
Difference between rent and mortgage payment: $339
Annual savings when you buy instead of rent: $4,068
28. Philadelphia
Median list price for a single-family residence: $235,000
Monthly rent: $1,400
20% down payment: $47,000
Monthly mortgage payment after 20% down: $1,055
Difference between rent and mortgage payment: $345
Annual savings when you buy instead of rent: $4,140
27. Columbus, Ohio
Median list price for a single-family residence: $184,900
Monthly rent: $1,343
20% down payment: $36,980
Monthly mortgage payment after 20% down: $997
Difference between rent and mortgage payment: $346
Annual savings when you buy instead of rent: $4,146
26. Sacramento, California
Median list price for a single-family residence: $343,900
Monthly rent: $1,850
20% down payment: $68,780
Monthly mortgage payment after 20% down: $1,504
Difference between rent and mortgage payment: $346
Annual savings when you buy instead of rent: $4,152
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25. Lawrenceville, Georgia
Median list price for a single-family residence: $253,850
Monthly rent: $1,550
20% down payment: $50,770
Monthly mortgage payment after 20% down: $1,191
Difference between rent and mortgage payment: $359
Annual savings when you buy instead of rent: $4,308
24. Corpus Christi, Texas
Median list price for a single-family residence: $216,500
Monthly rent: $1,495
20% down payment: $43,300
Monthly mortgage payment after 20% down: $1,134
Difference between rent and mortgage payment: $361
Annual savings when you buy instead of rent: $4,332
23. Memphis, Tennessee
Median list price for a single-family residence: $115,000
Monthly rent: $925
20% down payment: $23,000
Monthly mortgage payment after 20% down: $563
Difference between rent and mortgage payment: $362
Annual savings when you buy instead of rent: $4,344
22. Phoenix
Median list price for a single-family residence: $285,000
Monthly rent: $1,575
20% down payment: $57,000
Monthly mortgage payment after 20% down: $1,199
Difference between rent and mortgage payment: $376
Annual savings when you buy instead of rent: $4,512
21. Mesa, Arizona
Median list price for a single-family residence: $285,000
Monthly rent: $1,595
20% down payment: $57,000
Monthly mortgage payment after 20% down: $1,199
Difference between rent and mortgage payment: $396
Annual savings when you buy instead of rent: $4,752
20. Columbia, South Carolina
Median list price for a single-family residence: $185,000
Monthly rent: $1,199
20% down payment: $37,000
Monthly mortgage payment after 20% down: $801
Difference between rent and mortgage payment: $398
Annual savings when you buy instead of rent: $4,776
19. Cincinnati
Median list price for a single-family residence: $214,900
Monthly rent: $1,513
20% down payment: $42,980
Monthly mortgage payment after 20% down: $1,114
Difference between rent and mortgage payment: $399
Annual savings when you buy instead of rent: $4,782
18. Minneapolis
Median list price for a single-family residence: $299,000
Monthly rent: $1,825
20% down payment: $59,800
Monthly mortgage payment after 20% down: $1,425
Difference between rent and mortgage payment: $400
Annual savings when you buy instead of rent: $4,800
17. Cleveland
Median list price for a single-family residence: $86,000
Monthly rent: $895
20% down payment: $17,200
Monthly mortgage payment after 20% down: $489
Difference between rent and mortgage payment: $406
Annual savings when you buy instead of rent: $4,872
16. Winston-Salem, North Carolina
Median list price for a single-family residence: $192,990
Monthly rent: $1,275
20% down payment: $38,598
Monthly mortgage payment after 20% down: $866
Difference between rent and mortgage payment: $409
Annual savings when you buy instead of rent: $4,908
15. Norfolk, Virginia
Median list price for a single-family residence: $220,000
Monthly rent: $1,425
20% down payment: $44,000
Monthly mortgage payment after 20% down: $1,008
Difference between rent and mortgage payment: $417
Annual savings when you buy instead of rent: $5,004
14. Orlando, Florida
Median list price for a single-family residence: $290,000
Monthly rent: $1,730
20% down payment: $58,000
Monthly mortgage payment after 20% down: $1,309
Difference between rent and mortgage payment: $421
Annual savings when you buy instead of rent: $5,052
Related: Cost of Renting vs. Owning a Home in Every State
13. Jacksonville, Florida
Median list price for a single-family residence: $215,000
Monthly rent: $1,395
20% down payment: $43,000
Monthly mortgage payment after 20% down: $964
Difference between rent and mortgage payment: $431
Annual savings when you buy instead of rent: $5,172
12. Denver
Median list price for a single-family residence: $470,000
Monthly rent: $2,400
20% down payment: $94,000
Monthly mortgage payment after 20% down: $1,965
Difference between rent and mortgage payment: $435
Annual savings when you buy instead of rent: $5,220
11. St. Paul, Minnesota
Median list price for a single-family residence: $229,000
Monthly rent: $1,525
20% down payment: $45,800
Monthly mortgage payment after 20% down: $1,089
Difference between rent and mortgage payment: $436
Annual savings when you buy instead of rent: $5,232
10. Chula Vista, California
Median list price for a single-family residence: $534,900
Monthly rent: $2,750
20% down payment: $106,980
Monthly mortgage payment after 20% down: $2,304
Difference between rent and mortgage payment: $446
Annual savings when you buy instead of rent: $5,352
9. Buffalo, New York
Median list price for a single-family residence: $109,900
Monthly rent: $1,100
20% down payment: $21,980
Monthly mortgage payment after 20% down: $645
Difference between rent and mortgage payment: $455
Annual savings when you buy instead of rent: $5,460
8. Santa Ana, California
Median list price for a single-family residence: $549,900
Monthly rent: $2,800
20% down payment: $109,980
Monthly mortgage payment after 20% down: $2,331
Difference between rent and mortgage payment: $469
Annual savings when you buy instead of rent: $5,628
7. Madison, Wisconsin
Median list price for a single-family residence: $300,000
Monthly rent: $2,100
20% down payment: $60,000
Monthly mortgage payment after 20% down: $1,602
Difference between rent and mortgage payment: $498
Annual savings when you buy instead of rent: $5,976
6. Baltimore
Median list price for a single-family residence: $159,970
Monthly rent: $1,325
20% down payment: $31,994
Monthly mortgage payment after 20% down: $814
Difference between rent and mortgage payment: $511
Annual savings when you buy instead of rent: $6,132
5. Silver Spring, Maryland
Median list price for a single-family residence: $419,000
Monthly rent: $2,400
20% down payment: $83,800
Monthly mortgage payment after 20% down: $1,864
Difference between rent and mortgage payment: $536
Annual savings when you buy instead of rent: $6,432
4. Aurora, Colorado
Median list price for a single-family residence: $355,000
Monthly rent: $2,095
20% down payment: $71,000
Monthly mortgage payment after 20% down: $1,484
Difference between rent and mortgage payment: $611
Annual savings when you buy instead of rent: $7,332
3. Hialeah, Florida
Median list price for a single-family residence: $324,740
Monthly rent: $2,145
20% down payment: $64,948
Monthly mortgage payment after 20% down: $1,474
Difference between rent and mortgage payment: $671
Annual savings when you buy instead of rent: $8,052
2. Washington
Median list price for a single-family residence: $600,000
Monthly rent: $3,199
20% down payment: $120,000
Monthly mortgage payment after 20% down: $2,479
Difference between rent and mortgage payment: $720
Annual savings when you buy instead of rent: $8,640
1. Naples, Florida
Median list price for a single-family residence: $399,000
Monthly rent: $4,500
20% down payment: $79,800
Monthly mortgage payment after 20% down: $1,702
Difference between rent and mortgage payment: $2,798
Annual savings when you buy instead of rent: $33,576
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Methodology: GOBankingRates analyzed the 100 cities with the biggest housing markets in the U.S. to determine the cities where you can save on housing in the long term by opting to buy rather than rent. GOBankingRates first compiled the median listing price for homes in each city, sourced from Zillow. Using the median listing price, a median monthly mortgage payment estimate was calculated via SmartAsset’s mortgage calculator, using a 20% down payment, Federal Reserve Economic Data’s current 30-year fixed mortgage rate and local annual property tax rates (also from SmartAsset). This was then compared to the median monthly rental price for single-family residences in each city, sourced from Zillow, to find the difference between a median mortgage payment and the median rent in each city. Cities were then ranked according to how much the median rent exceeded the median mortgage payment, with No. 1 being the city where the most money can be saved by buying over renting. All data used to conduct this study was compiled and verified on Dec. 5, 2019.
This article originally appeared on GOBankingRates.com: 50 Cities Where It’s Cheaper To Buy a Home Than Rent
