Published by Forbes.com | December 6, 2022
If you’re still paying off your mortgage, renting is likely cheaper than owning.
A new study by LendingTree found that renting is usually cheaper than owning a home, but not always. To look at how the cost of renting a home differs from owning one, the online loan marketplace analyzed Census Bureau data to compare monthly rental and housing payments for homes with and without mortgages in the 50 largest metros. The survey found that renting is cheaper than owning a home — at least until a person has paid off their mortgage.
“If you are still paying off your mortgage, renting is likely cheaper than owning in each of the nation’s 50 largest metros,” according to Jacob Channel, senior economist for LendingTree and author of the report.
“On average, the difference between median gross rent and median housing costs for homes with a mortgage is $564 a month. This is lower than in 2019, when renters paid an average of $593 less monthly than homeowners with mortgages. A combination of factors, including record-low interest rates that offset rising home prices, likely contribute to this smaller gap.”
–Jacob Channel, senior economist for LendingTree
New York, San Francisco and San Jose, California are the metros where the spread in costs between renting and owning a home with a mortgage is widest. In these metros, median monthly gross rent is an average of $1,262 less than the median monthly housing costs for a home with a mortgage. Unlike across the 50 metros, this gap widened — from $1,221 in 2019 — across the same three metros at the top, though they were ordered differently.
Orlando, Phoenix and Jacksonville, Florida are the metros where the gap between renting and owning a home with a mortgage is the narrowest.
