This article originally appeared on HIRE A HELPER
Key Findings
- The average rent across the United States is $1,050 a month
- The average mortgage payment in the U.S. is $992/month
- At $2,600/month on average, Sunnyvale, CA has the highest rent in the country
- Gadsen, AL has the lowest rent in the U.S. at $430/month on average
- Mortgage repayments are highest in and around Washington, D.C., at more than $2,000/month on average
- Property taxes, utilities, and insurance add an average of $563 to the cost of owning a home
- Homeowners tend to make 90% more than renters ($98,700 versus $51,700, on average)
- Renters spend an average of 32% of their disposable income on housing, while homeowners spend an average of 20%
- In 333 out of 335 cities studied, homeowners spend less of their income on accommodation than renters
It’s a question at the heart of many debates and countless articles: Is it better to buy (if you can afford it) or to rent (if you can’t)? Which is more financially beneficial? Which is actually more affordable, and why?
One way to think about this debate is to take the average home price in each state, then estimate your repayment based on some assumptions (e.g., 20% down payment, 3% interest over 30 years, etc.), then finally, compare that number to average rent prices.
But that comparison alone doesn’t tell us the true value of renting.
What does? We looked at 335 of the biggest cities and metropolitan areas in the United States and broke down how rent levels compare to mortgage rates, how they stack up against typical incomes in each of these areas, and more.
