Four major US cities where buying a house is cheaper than renting

Renting has skyrocketed across the country in recent years, as have mortgage rates. But there are 4 major cities in the United States where it can be more profitable to take a house on a mortgage than to rent, reports The Hill.

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When it comes to major U.S. cities, there are only four where you can save money every month by buying a home with a mortgage rather than paying rent, a study by a real estate brokerage found. Redfin.

With mortgage rates now higher than they have been in decades, it might seem surprising that any major city in the US could be cheaper for buyers. There are four exceptions - XEuston, Cleveland, Philadelphia and Detroit.

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The biggest discount, according to Redfin, may be in Detroit, where buying a typical home with a mortgage is 24% cheaper than renting. It is followed by Philadelphia (7%), Cleveland (4%) and Houston (1%).

In the rest of the country, the balance works in favor of the tenant, with tenants receiving a monthly discount of 25%.

In expensive California cities like San Francisco and San Jose, owning a home is as much as 139% and 165% more expensive, respectively, than renting. A study that used a 6,5% mortgage rate and analyzed single-family homes, condominiums/co-ops, and townhouses found that cities that Americans have loved during the pandemic are also almost completely lacking in housing that is cheaper to buy than to rent. In Sacramento, Phoenix and Las Vegas it is only 1%, while in Austin it is 5%.

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Incentive to buy

“Buying a home often makes more financial sense than renting if you can afford the down payment and monthly mortgage because you're building equity,” said Redfin deputy chief economist Taylor Marr. “When you own your home, your home pays you, and when you rent, you and your home pay the landlord.”

However, Marr acknowledged that the purchase is not for everyone, especially for people who move regularly or don't have the cash for a down payment at such high rates.

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Pending home sales were broadly flat in April, down 11,3% in the Northeast but up 4,7%, 3,6%, and 0,01% in the West, Midwest, and South, according to the National Association of Realtors. .XNUMX% respectively.

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