Renting vs. buying: How housing costs compare across America

Renting vs. buying: How housing costs compare across America

The cost of housing isn’t just limited to the price tag of your monthly rent or the cost of financing the purchase price of your home. On the rental side, the cost of utilities can add a consistent, considerable amount to your costs. For homeowners, mortgage costs are padded not only by utilities but homeowners’ insurance, property taxes and maintenance costs. These hidden costs can add up and change the dynamics of trade-offs between the flexibility of renting versus the security of owning your own home.

With this in mind, SmartAsset ranked 342 of the largest U.S. cities based on the median gross rental and housing costs residents face on a monthly basis—including add-ons like utilities, insurance, maintenance and taxes—to help people most accurately evaluate the ongoing costs of buying versus renting.

Key findings

• It costs twice as much to be a homeowner than a renter in Newark, New Jersey. Homeowners face median monthly costs of $2,641, or 1.97 times as much as the median monthly costs of $1,341 for renters. The median home value for owner-occupied units here is $403,500—just slightly higher than the median across large cities.

• Homeowners pay $1,564 more per month than renters in Oakland, California. This is the greatest dollar premium on homeownership studywide. Homeowners face particularly high costs in Oakland, with a median $3,502 in housing bills per month, compared to $1,938 for renters. Overall, Oakland ranks sixth studywide for homeownership costs as a percentage of rental costs.

• Renters have the best advantage in Surprise, Arizona. Renters have the biggest advantage in Surprise, where renting offers a roughly 15% discount—or savings of $321 per month—compared to homeownership. Homeowners pay an average of $1,789, compared to $2,110 for renters.

• It is cheaper to own your home rather than rent in 17 cities. Most of these cities are in Arizona (Surprise, San Tan Valley, Buckeye, Gilbert, Chandler, Tempe, and Goodyear); and Florida (Palm Bay, Riverview, Brandon, Lehigh Acres, Palm Coast, Port St. Lucie, Spring Hill, and Cape Coral). Other cities where homeowners pay less include South Fulton, Georgia, and North Charleston, South Carolina.

• Renters and homeowners are at a dead tie in terms of costs in South Bend, Indiana. Rent and homeownership are both inexpensive in South Bend, both coming in at a median of $1,062 per month. The average home value here is $148,800.

Top 10 cities where homeownership is more expensive than renting

1. Newark, New Jersey

• Housing cost ratio (Homeowner:Renter): 1.969

• Difference in monthly costs for homeowners relative to renters: $1,300

• Median monthly costs while renting: $1,341

• Median monthly housing costs for homeowners: $2,641

• Median home value: $403,500

1. Elizabeth, New Jersey

• Housing cost ratio (Homeowner:Renter): 1.908

• Difference in monthly costs for homeowners relative to renters: $1,372

• Median monthly costs while renting: $1,511

• Median monthly housing costs for homeowners: $2,883

• Median home value: $468,200

1. New Orleans

• Housing cost ratio (Homeowner:Renter): 1.898

• Difference in monthly costs for homeowners relative to renters: $1,080

• Median monthly costs while renting: $1,203

• Median monthly housing costs for homeowners: $2,283

• Median home value: $306,400

1. Yonkers, New York

• Housing cost ratio (Homeowner:Renter): 1.826

• Difference in monthly costs for homeowners relative to renters: $1,380

• Median monthly costs while renting: $1,671

• Median monthly housing costs for homeowners: $3,051

• Median home value: $541,200

1. Los Angeles

• Housing cost ratio (Homeowner:Renter): 1.810

• Difference in monthly costs for homeowners relative to renters: $1,519

• Median monthly costs while renting: $1,875

• Median monthly housing costs for homeowners: $3,394

• Median home value: $919,900

1. Oakland, California

• Housing cost ratio (Homeowner:Renter): 1.807

• Difference in monthly costs for homeowners relative to renters: $1,564

• Median monthly costs while renting: $1,938

• Median monthly housing costs for homeowners: $3,502

• Median home value: $915,000

1. Fargo, North Dakota

• Housing cost ratio (Homeowner:Renter): 1.786

• Difference in monthly costs for homeowners relative to renters: $750

• Median monthly costs while renting: $954

• Median monthly housing costs for homeowners: $1,704

• Median home value: $282,700

1. Metairie, Louisiana

• Housing cost ratio (Homeowner:Renter): 1.783

• Difference in monthly costs for homeowners relative to renters: $895

• Median monthly costs while renting: $1,143

• Median monthly housing costs for homeowners: $2,038

• Median home value: $319,700

1. New York City

• Housing cost ratio (Homeowner:Renter): 1.766

• Difference in monthly costs for homeowners relative to renters: $1,339

• Median monthly costs while renting: $1,748

• Median monthly housing costs for homeowners: $3,087

• Median home value: $743,000

1. East Los Angeles, California

• Housing cost ratio (Homeowner:Renter): 1.759

• Difference in monthly costs for homeowners relative to renters: $1,091

• Median monthly costs while renting: $1,437

• Median monthly housing costs for homeowners: $2,528

• Median home value: $633,600

Top 10 cities where renting is more expensive than homeownership

1. Surprise, Arizona

• Housing cost ratio (Homeowner:Renter): 0.848

• Difference in monthly costs for homeowners relative to renters: -$321

• Median monthly costs while renting: $2,110

• Median monthly housing costs for homeowners: $1,789

• Median home value: $443,500

1. San Tan Valley, Arizona

• Housing cost ratio (Homeowner:Renter): 0.857

• Difference in monthly costs for homeowners relative to renters: -$300

• Median monthly costs while renting: $2,091

• Median monthly housing costs for homeowners: $1,791

• Median home value: $433,500

1. Palm Bay, Florida

• Housing cost ratio (Homeowner:Renter): 0.890

• Difference in monthly costs for homeowners relative to renters: -$190

• Median monthly costs while renting: $1,722

• Median monthly housing costs for homeowners: $1,532

• Median home value: $300,600

1. Riverview, Florida

• Housing cost ratio (Homeowner:Renter): 0.892

• Difference in monthly costs for homeowners relative to renters: -$240

• Median monthly costs while renting: $2,215

• Median monthly housing costs for homeowners: $1,975

• Median home value: $392,100

1. Brandon, Florida

• Housing cost ratio (Homeowner:Renter): 0.903

• Difference in monthly costs for homeowners relative to renters: -$184

• Median monthly costs while renting: $1,890

• Median monthly housing costs for homeowners: $1,706

• Median home value: $360,200

1. Lehigh Acres, Florida

• Housing cost ratio (Homeowner:Renter): 0.903

• Difference in monthly costs for homeowners relative to renters: -$167

• Median monthly costs while renting: $1,718

• Median monthly housing costs for homeowners: $1,551

• Median home value: $321,700

1. Buckeye, Arizona

• Housing cost ratio (Homeowner:Renter): 0.925

• Difference in monthly costs for homeowners relative to renters: -$145

• Median monthly costs while renting: $1,930

• Median monthly housing costs for homeowners: $1,785

• Median home value: $426,000

1. Palm Coast, Florida

• Housing cost ratio (Homeowner:Renter): 0.938

• Difference in monthly costs for homeowners relative to renters: -$111

• Median monthly costs while renting: $1,790

• Median monthly housing costs for homeowners: $1,679

• Median home value: $385,000

1. South Fulton, Georgia

• Housing cost ratio (Homeowner:Renter): 0.948

• Difference in monthly costs for homeowners relative to renters: -$94

• Median monthly costs while renting: $1,815

• Median monthly housing costs for homeowners: $1,721

• Median home value: $334,100

1. Port St. Lucie, Florida

• Housing cost ratio (Homeowner:Renter): 0.952

• Difference in monthly costs for homeowners relative to renters: -$98

• Median monthly costs while renting: $2,053

• Median monthly housing costs for homeowners: $1,955

• Median home value: $397,500

Data and methodology

To find the net difference in monthly costs for homeowners versus renters, SmartAsset compared the following variables from 342 cities with populations over 100,000 people for which data was available. All data comes from the U.S. Census Bureau’s 2023 American Community Survey.

• Mortgage cost: The median monthly housing costs for owner-occupied housing units with a mortgage. This includes the cost of mortgage, insurance, taxes, common utilities, and any applicable condominium and mobile home fees.

• Rent cost: The gross median monthly rent for occupied units paying rent. This includes the cost of rent plus average utility and fuel costs.

Cities were ranked on the relative difference between monthly costs for homeowners versus those for renters. The dollar value in difference as well as median home values was also observed.

This story was produced by SmartAsset and reviewed and distributed by Stacker.