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GOBankingRates
5 Cities in the South Where It’s Cheaper To Buy a Home Than Rent
By Dawn Allcot,
4 hours ago
As home prices and mortgage rates remain stubbornly elevated , overall home ownership in the second quarter of 2024 was down slightly from the same time in 2023. New home sales in June 2024 were lower than they’ve been since 2011. Yet, for U.S. residents unwilling to give up the American dream of homeownership, there are still some cities where it is actually cheaper to buy a home than to rent.
Of course, you’ll still need to save or acquire the money for a down payment if you intend to buy a home. You’ll need to factor in additional costs such as home maintenance and repairs. But you can potentially snag a monthly mortgage payment lower than the price of rent in these five U.S. cities in the South.
Methodology: To find the cheapest places to buy a home in the South, we looked up median rent prices from RentCafe.com , and then the median home price at Zillow.com . We calculated a 20% down payment and then used a mortgage calculator at 6.46% interest to find the monthly mortgage payment in these cities .
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Memphis, Tennessee
Average rent: $1,703
Average home value: $150,672
20% down: $30,134
Average mortgage payment at 6.46%: $759
The growing tech economy in Memphis — coupled with a low cost of living that is roughly 14% less than the national average — makes this Tennessee city a desirable metropolis for young professionals and family.
A vibrant nightlife, temperate climate, and an affordable housing market put Memphis at the top of our list of places in the South where it’s better (and cheaper) to buy than to rent.
On the border between the mid-Atlantic states and the South, Baltimore, Maryland combines Southern hospitality with cooler weather and proximity to Northeastern big-city living in nearby Washington, D.C. Homes in Baltimore are surprisingly affordable for all the city has to offer.
Whether you’re looking to retire or seeking a starter home to raise a family, Montgomery, Alabama, has affordable home options and an overall low cost of living.
The city’s rich history, multitude of parks, and a solid public school system make this city appealing to many people.
traveler1116 / Getty Images
Fayetteville, North Carolina
Average rent: $1,513 (3 BR)
Average home value: $218,367
20% down: $43,673
Average mortgage payment (at 6.46%): $1,100
A military town off the convenient I-95 corridor, Fayetteville, North Carolina, offers moderate temperatures compared to other regions in the South and a cost of living 20% lower than the national average.
With plenty of activities for people of all ages, a good public school system, and increasing job opportunities as companies like Amazon have moved to the area, Fayetteville is a great place to settle down in a starter home and raise a family.
DenisTangneyJr / Getty Images/iStockphoto
Laredo, Texas
Average rent: $1,376 (3 BR)
Average home value: $210,620
20% down: $42,124
Average mortgage payment (at 6.46%): $1,061
If you’re looking for the advantages of Texas, including no state income tax, but feel priced out of larger cities like Austin and Dallas, consider Laredo, Texas.
With a rich cultural heritage that combines Mexican and American traditions — plus easy access to the Rio Grande and parks that encourage getting closer to nature — Laredo can be a great city to buy a home and raise a family (or retire to a quiet life on the border).
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