News and Press


Press Inquires

Find us on Social Media


Back

Rents Continue to Outpace the Cost of Homeownership

The choice between buying a home and renting is one of the biggest financial decisions a person can make. On the national level, buying a home is 23% less expensive than renting (a good rule of thumb for those making a 20% down payment). This translates to a break-even horizon (meaning the time it takes for the costs of owning a home to equal the cost of renting) of less than two years in 70% of United States metropolitan areas. If you are one of the lucky ones in Dallas (where the break-even horizon is at its shortest), it only takes 1.3 years to bridge this gap. Even in the Washington D.C., where the break-even horizon is at its longest (four and a half years), it still makes financial sense to purchase a home instead of renting one.

The gap between the cost of renting versus the cumulative costs associated with home ownership (mortgage payments, interest, taxes, and upkeep) is driven – in large part – by the hesitance to take the dive into home ownership. As more renters enter the market, the number of renters is continuously outstripping the supply of available apartments. Millennials are particularly inclined to rent; home ownership among Millennials is currently hovering at just 36% (compared to 65% amongst the general population). While student debt definitely plays a role in this disparity, the stricter lending guidelines implemented after the financial crisis have made it nearly impossible for a large portion of the population to qualify.