The Challenge of Finding a Place to Live: Renting vs. Buying in 20 Major U.S. Cities
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Determining whether to buy a home or rent an apartment is a complicated decision and one you want to get right. To make things harder, each option comes with clear benefits and disadvantages.
Renting offers maximum freedom, allowing you to move after the lease is complete. This may be important for people still searching for a more permanent job or location. Rental houses or apartments also require little to no maintenance on the renter’s end, since landlords are responsible for fixing major repairs. And of course, renters avoid expensive closing costs, which can range between 3-20% of the price of the property depending on the terms of the purchase.
But renting doesn’t make sense for everyone. Homeowners can also take advantage of tax savings benefits such as deducting mortgage interest and property taxes from your annual income. Houses typically appreciate in value over time as well, meaning your $200,000 home could turn into a $250,000 home by the time you’re ready to sell. However, the biggest advantage of home ownership is building up equity. Each principal payment you make may increase your overall equity and future purchasing power.
Thankfully, LendingTree has made this tough choice a bit easier with its latest study. LendingTree analyzed the top markets in the United States to see which cities had the widest gap between monthly rent versus mortgages. The cities with the widest gap meant mortgages cost significantly more than average apartments. In some markets, this means that the cost of owning a home can be nearly double the cost of the apartment, making it a bad market for aspiring homeowners. Inversely, the markets with the narrowest gap showed apartments and mortgages at nearly equal rates, meaning home owning is a more conceivable option.
To take this a step further and help you make the most informed decision, we’ve added grades from Niche.com. Niche’s algorithm grades cities based on hundreds of quality of life factors including: weather, public schools, jobs, cost of living, crime and safety, and more.
So, if you’re still on the fence about owning or renting, take a look at these cities before making your next move.