If you rent the property where you live, you undoubtedly have heard this from well-meaning friends and relatives: “You’re throwing your money away on rent. You really should buy a house!”
But should you? That depends on a variety of factors, starting with where you live.
A study by Today’s Homeowner looked at the cost of buying vs. renting in 97 major cities and found that renting is cheaper than buying in 46 of them – and the money you’d save by renting could be considerable.
For the study, Today’s Homeowner looked at the big picture of the cost of home ownership, including: the average sale price of homes from July 2022, using data from Redfin; property taxes, based on figures from the U.S. Census Bureau’s American Community Survey; average maintenance costs, with estimates from Angi; interest rates, sourced by Freddie Mac; and the price of homeowners insurance premiums with figures from Quadrant Information Services.
When all 97 cities are considered, homeowners will spend an average of $1.30 million over 30 years, while renters will pay an average of $1.26 million.
Nowhere is the comparison between the costs of homeowners vs. renters more stunning than in California, home to seven of the 10 cities where it costs far more to buy than to rent.
