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Renting vs. Buying Real Estate: See the Cost Difference in These 13 Texas Cities
By Caitlyn Moorhead,
5 hours ago
The decision between renting and buying a home is a big one, especially in a state where everything is bigger — like Texas. How your savings stack up when paired against rising cost of living expenses can be the difference between living paycheck to paycheck or putting money aside for a down payment.
One of the primary advantages of renting is the lower initial cost. Typically, renters are required to pay a security deposit, which is usually equivalent to one or two months’ rent, and possibly an application fee. These upfront costs are relatively minimal compared to buying a home.
Purchasing a home, though, involves significant upfront expenses. Buyers need to have a down payment, which can range anywhere from 3% to 20% of the home’s purchase price. Additionally, buyers must cover closing costs, home inspections, appraisals and potential repairs.
Monthly rental payments are typically predictable and include the cost of living in the home and, in some cases, utilities such as water and trash removal. Over time, rent prices can increase, often annually, depending on market conditions and lease terms.
Monthly mortgage payments are generally more stable for homeowners and can include principal, interest, property taxes and homeowner’s insurance, though they can also fluctuate based on changes in property taxes and insurance premiums.
GOBankingRates recently completed a study to determine the cost difference between renting and buying based on such factors as median household income and average home values, mortgage payments or rental costs. Here are the key takeaways from these 13 cities in Texas .
Methodology: For this study, GOBankingRates found the average cost of living for homeowners and renters in the USA’s largest 100 cities by population. First, GOBankingRates found the top 100 cities by population, as sourced from the U.S. Census American Community Survey. For each city, a number of factors were found, including: total population, total households and household median income, all sourced from the U.S. Census American Community Survey. The cost of living indexes were sourced from Sperling’s BestPlaces, and the national average expenditure costs for all residents were used, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey for all residents. The single family home value was sourced from the Zillow Home Value Index, and by assuming a 10% down payment and using the national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage rate can be calculated. The average rental cost was sourced from the Zillow Observed Rental Index for each city. The average rent cost and average mortgage cost can be used with the average expenditure cost to calculate the total cost of living for renters and homeowners. The cities were ranked to show the cheapest to most expensive cities, then sorted by total population to show the cost of living for homeowners and renters in the top 100 cities by population. All data was collected on and is up to date as of July 15, 2024.
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