The Cost of Renting vs. Owning a Home in Every State

canstockphoto22765888 rent or buy

It’s cheaper to own a home than it is to rent one in 42 states

By Jeff Sorg, OnlineEd Blog

(July 19, 2016) – To help Americans better understand if renting or owning a home is a more affordable option, personal finance website GOBankingRates.com has released a guide detailing how monthly rent compares to monthly mortgage payments across the U.S.

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The investigation found that it’s cheaper to own a home than it is to rent one in 42 states. Renting is more affordable in only eight states and the District of Columbia.

“The good news is mortgage rates are near historic lows,” said Kristen Bonner, lead researcher on the study. “Unfortunately, Americans are still running into road blocks with being able to save enough money to afford a down payment, and are therefore forced to rent.”

The study compared median rent prices for single-family homes against the median list price of homes in each state. GOBankingRates assumed a 20 percent down payment for the median list price and applied a 30-year fixed-rate loan term. It also included the cost of property taxes and insurance.

Where Renting Is Cheaper than Owning

Prices illustrate the monthly amount saved by renting.

  • Hawaii: $515
  • Montana: $248
  • Utah: $242
    Idaho: $204
  • District of Columbia: $144
  • Colorado: $137
  • Wyoming: $99
  • Delaware: $75
  • Oregon: $12

Top 10 Places Where Owning Is Cheaper Than Renting

Prices illustrate the monthly amount saved by owning.

  • New York: $1,635
  • Massachusetts: $559
  • Illinois: $522
  • New Jersey: $472
  • Pennsylvania: $461
  • Florida: $398
  • Maine: $396
  • Ohio: $375
  • Alaska: $334
  • Rhode Island: $334

Stand-out Findings:

The monthly rent of a single family home in New York is $3,295 a month — almost double the monthly cost of owning.
It’s only $27 more a month to rent a home than it is to own a home in Arizona, and $67 more a month in South Dakota.
If you are interested in owning property in Hawaii, expect to pay $515 more a month than your renting neighbor.
Methodology: GOBankingRates.com surveyed all 50 states and the District of Columbia to identify where it’s more expensive per month to own or rent a home. The median monthly rent was sourced from May 2016 Zillow data on single-family homes. GOBankingRates sourced median home list prices in each state using May 2016 Zillow data. Current mortgage rates in each state were sourced on June 24, 2016, from Zillow. GOBankingRates then used the Zillow mortgage calculator to determine the monthly mortgage payment, assuming a 20 percent down payment on a 30-year fixed-loan. The mortgage calculator also took insurance and taxes into consideration to determine the monthly mortgage payment.

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Jeff Sorg

About the Author

Jeff Sorg is a co-founder of OnlineEd®, a Web-based vocational school founded in 1997 where he also serves as Corporate Secretary, Chief Operating Officer, and School Director. Sorg holds vocational instructor licenses in Oregon, Washington, California, and Nevada and has authored numerous pre-licensing and continuing education courses. Sorg was awarded the International Distance Education Certification Center's CDEi Designation for distance education in 2008. OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.