Are you curious about the financial impact of Homeownership vs. renting a home in your state? Our expert analysis reveals that homeowners in the US pay 33 to 93% more every month for housing compared to renters. Discover the surprising cost comparison and find out how it can influence your housing decision. Read on to learn more about the striking differences between homeownership and renting.
Discover the striking cost difference Homeownership vs renting a home in your state. Our comprehensive data analysis reveals that U.S. homeowners pay an astonishing 33% to 93% more every month for housing compared to their renting counterparts. Read on to uncover the financial implications that can influence your housing decision.
Owning a home is often considered the American dream — and its an expensive one. Homeowners in all 50 states and Washington, D.C., pay from 33% to 93% more for housing each month than do renters living in the same state, according to a new NerdWallet analysis.
But many homeowners reap benefits that you can’t get from renting, such as financial security and stability, tax deductions and a vehicle for retirement savings. With each mortgage payment, you get closer to fully owning the home. The equity you build can be leveraged for loans like cash-out refinances, home equity loans and lines of credit that can be used to improve the home and boost its value or be used in financial emergencies.
While renting cant offer those long-term financial benefits, its cheaper to rent on a month-to-month basis, the analysis found. If youre wondering how to save money for a down payment, renting can help you build that nest egg — but in extremely expensive or competitive markets, renting might be better for the long haul. If youre considering buying, before entering the market, use a mortgage calculator to estimate the costs and compare mortgage rates to find the best deal.
To determine the monthly homeownership premium — the additional cost of owning instead of renting, expressed as a percentage — NerdWallet compared 2015 American Community Survey data from the U.S. Census Bureau for the median gross rent and median homeownership cost in each state and Washington, D.C. Median gross rent includes the costs of monthly rent and utilities for all kinds of rental properties, and median homeownership cost includes monthly mortgage payments, real estate taxes, insurance and utilities. This comparison doesnt include the down payment required to buy a home, which is traditionally 20% of the home price for conventional mortgages, but is lower for FHA or VA loans.
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Key takeaways
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Owning is more expensive everywhere. Across all 50 states and Washington, D.C., it costs more each month to own a home than to rent. The median cost people pay nationwide to own a home is 54% more than the median cost to rent each month.
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The smallest difference is still a third more to own. The state where the premium to own a home is lowest is Florida, where it costs a median of 33% more to own than to rent. The states with the next lowest premiums are Colorado (40%) and Arizona (41%).
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In some states, the cost of owning far eclipses renting. In New Jersey, the state with the highest homeownership premium, the median monthly cost of owning is nearly double that of renting (93%). The next most expensive places to own are Rhode Island, where the median homeownership cost is 84% higher than renting, and Connecticut, where owners pay a median of 82% more than renters each month for housing.
Scroll through the table to see the data for all states and Washington, D.C.
| State | Homeownership premium | Median monthly costs to own | Median monthly costs to rent | Difference |
|---|---|---|---|---|
| New Jersey | 93% | $2,349 | $1,214 | $1,135 |
| Rhode Island | 84% | $1,730 | $938 | $792 |
| Connecticut | 82% | $2,020 | $1,108 | $912 |
| South Dakota | 81% | $1,225 | $675 | $550 |
| New Hampshire | 80% | $1,828 | $1,017 | $811 |
| Massachusetts | 76% | $2,048 | $1,164 | $884 |
| Montana | 72% | $1,316 | $763 | $553 |
| Wisconsin | 72% | $1,359 | $792 | $567 |
| New York | 71% | $2,009 | $1,173 | $836 |
| Illinois | 70% | $1,588 | $936 | $652 |
| Nebraska | 69% | $1,269 | $750 | $519 |
| Maine | 69% | $1,340 | $792 | $548 |
| Wyoming | 67% | $1,364 | $815 | $549 |
| North Dakota | 67% | $1,297 | $775 | $522 |
| Vermont | 66% | $1,530 | $923 | $607 |
| Ohio | 65% | $1,228 | $746 | $482 |
| Minnesota | 64% | $1,459 | $888 | $571 |
| Kansas | 64% | $1,279 | $782 | $497 |
| Washington, D.C. | 63% | $2,312 | $1,417 | $895 |
| Iowa | 63% | $1,170 | $718 | $452 |
| Pennsylvania | 63% | $1,414 | $868 | $546 |
| Oregon | 63% | $1,534 | $943 | $591 |
| California | 62% | $2,123 | $1,311 | $812 |
| Washington | 58% | $1,704 | $1,080 | $624 |
| Missouri | 57% | $1,200 | $763 | $437 |
| Alaska | 56% | $1,817 | $1,163 | $654 |
| Texas | 56% | $1,453 | $932 | $521 |
| Kentucky | 55% | $1,089 | $702 | $387 |
| New Mexico | 55% | $1,214 | $783 | $431 |
| Alabama | 54% | $1,124 | $729 | $395 |
| Oklahoma | 53% | $1,159 | $759 | $400 |
| Louisiana | 52% | $1,219 | $800 | $419 |
| Utah | 52% | $1,408 | $925 | $483 |
| Idaho | 52% | $1,170 | $770 | $400 |
| Michigan | 52% | $1,220 | $803 | $417 |
| Hawaii | 50% | $2,248 | $1,500 | $748 |
| Mississippi | 50% | $1,083 | $724 | $359 |
| Maryland | 49% | $1,909 | $1,278 | $631 |
| North Carolina | 49% | $1,234 | $827 | $407 |
| Tennessee | 49% | $1,167 | $785 | $382 |
| Arkansas | 48% | $1,029 | $695 | $334 |
| Virginia | 48% | $1,692 | $1,144 | $548 |
| West Virginia | 44% | $972 | $675 | $297 |
| Indiana | 44% | $1,089 | $758 | $331 |
| Delaware | 44% | $1,506 | $1,049 | $457 |
| Georgia | 43% | $1,299 | $909 | $390 |
| South Carolina | 43% | $1,168 | $819 | $349 |
| Nevada | 42% | $1,396 | $980 | $416 |
| Arizona | 41% | $1,319 | $933 | $386 |
| Colorado | 40% | $1,558 | $1,111 | $447 |
| Florida | 33% | $1,394 | $1,046 | $348 |
METHODOLOGY
Blog analyzed one year of data from the U.S. Census Bureaus American Community Survey from 2015, the most-recent data available. To determine the homeownership premium, we used the median gross rent for all rental properties and the median homeownership cost for all states and Washington, D.C., to determine a percentage that shows the added cost, as a premium, that people pay each month to own a home.
Thanks to Source: https://www.nerdwallet.com/article/mortgages/cost-homeownership-vs-renting
owning vs. renting
owning vs. renting
owning vs. renting
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