Deciding whether to buy or rent in 2025? You’re not alone! A recent report found that in most areas of the U.S., owning a home is still more affordable than renting a three-bedroom home. While both renting and buying require a significant portion of income, homeownership remains the better long-term investment for those who can secure financing and a down payment.
Why Buying a Home is More Affordable Than Renting
- Homeownership Takes a Smaller Portion of Income – In nearly 60% of U.S. counties, the monthly costs of owning a single-family home consume less income than renting a three-bedroom property.
- Home Values Continue to Rise – While home prices have increased, so have wages in most markets. Many homebuyers are building equity instead of spending on rising rent costs.
- Rent Costs Are Climbing Faster Than Home Prices in Many Areas – In places like Houston, TX, Columbus, OH, and San Antonio, TX, rent is outpacing home prices, making ownership an even smarter move.
Regional Trends: Where Buying Makes the Most Sense
Best Areas for Homeownership:
- The Midwest and South are where buying is the most affordable, with 80% of counties in the Midwest and 60% in the South showing that homeownership is the better deal.
Cities Where Buying is the Best Option:
- Suffolk County, NY – Owning costs 59% of local wages, while renting takes 159%
- Naples, FL – Owning costs 79% of wages, renting costs 127%
- Chicago, IL – Owning costs 31%, renting costs 36%
Best Areas for Renting:
-The West Coast stands out as the one region where renting is the better financial choice. In about 80% of western counties, rent is a more affordable option than buying.
Cities Where Renting is the Better Option:
- Oakland, CA – Renting costs 48% of wages, while owning takes 87%
- Honolulu, HI – Renting costs 64%, while owning takes 103%
- San Mateo County, CA – Renting costs 31%, while owning takes 69%
Why Homeownership is Still the Smarter Move
- Equity Growth – Unlike rent, homeownership helps you build wealth over time. You’re investing in your future instead of paying your landlord’s mortgage.
- More Stability – Rents can rise unpredictably, while owning a home gives you financial stability with fixed mortgage payments.
- Tax Benefits – Homeownership can provide tax deductions that renting does not.
- Long-Term Savings – While down payments may seem like a hurdle, homeownership pays off in the long run compared to renting.
Key Takeaways
- In most of the country, homeownership is still more affordable than renting.
- The Midwest and South offer the best affordability for buyers.
- If you’re in the West, renting might be the better short-term option, but long-term homeownership still wins.
- Building equity and gaining financial stability make homeownership a smart investment.
Thinking about buying a home in 2025? Let’s explore your options and find the right mortgage solution for you!
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Source: ATTOM Data