Is it more expensive to own a home or rent a home?
They say to live the American dream, you need to own your home instead of renting. While for some this may be true, for others it’s not. There are many pros and cons to renting verse purchasing a home for sale and vise-verse. Let’s decipher if it’s more expensive to own a home or rent.
Factors that influence cost differences
Regardless of where you live, there are common costs that every homeowner must endure that renters simply don’t. Those include:
- Homeowners insurance
- Monthly Mortgage interest
- Monthly maintenance
- Yearly maintenance
- Yearly property taxes
- Land Taxes
- Costs when appliances break
- Landscaping/grounds keeping
- Down payment/closing costs/inspection fees
- HOA fees (if applicable)
There are also costs that every renter ensues that homeowners don’t. Those include:
- Application fees
- Renters insurance
- Interior structure fixes (if you hang or paint anything on the walls during your stay)
As you can see, the costs of owning a home are much larger than those costs when renting. When renting, your cost of living is an as-is determiner when you agree to pay monthly rent.
Areas where homeownership is cheaper than renting in the US
According to CNBC, there aren’t any states where rent far outweighs the cost of being a homeowner. Instead, being a homeowner was much more expensive than renting in all 50 US states.
The states where the difference in price is less than $500 includes:
- New Mexico
- North Carolina
- South Carolina
- West Virginia
As you can see, there are many states where it may be more beneficial to rent than purchase and vise verse. Add up your total allowances and budget for the month to make a logical decision on which option is right for you.