Owning a Houston Home is Cheaper than Renting
Owing a Houston home demands less of your monthly income than renting one, according to a new study by the Urban Institute. What is notable about this study, is that the rising cost of homes put many metropolitan areas in the opposite camp. Out of 33 major metros examined, it’s actually cheaper to rent in 16 of them.
Houston is one of the 17 cities where it’s more affordable to own, based upon an apple-to-apple comparison of renting a 3-bedroom single-family home, verses owning the same property. The methodology compared local median incomes against median rents and median home prices.
Boiling down the math, a median-income family in Houston would spend 28% of its income to rent a 3-bedroom home, but would only spend 25% of it on a mortgage payment for the same dwelling. The mortgage payment calculation factored in principal and interest, property taxes and insurance. The calculation assumed a 3.5% down payment and a 30-year, fixed-rate mortgage at 3.97%.
It should be noted that the study compares monthly housing costs side-by-side, and doesn’t get into forecasting annual rent increases, potential tax deductions, home equity appreciation, or home maintenance costs.
In the long run, home ownership offers the best return on the money for one very simple reason – you have something to show for all those monthly payments! A mortgage can be paid off, whereas rent is a never-ending obligation.
Ready to find your new Houston home? Obtaining the expert advice of the KW Energy Corridor Team is the first step in a successful home purchase! Contact us today for your personal real estate consultation!
KW Energy Corridor Team
11757 Katy Fairway | Suite 930
Houston, TX 77079