How Much More It Costs to Own vs. Rent in Your State

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How Much More It Costs to Own vs. Rent in Your State

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Owning a home is often considered the American dream — and it’s an expensive one. Homeowners in all 50 states and Washington, D.C., pay from 33% to 93% more for housing each month than do renters living in the same state, according to a new NerdWallet analysis.

But many homeowners reap benefits that you can't get from renting, such as financial security and stability, tax deductions and a vehicle for retirement savings. With each mortgage payment, you get closer to fully owning the home. The equity you build can be leveraged for loans like cash-out refinances, home equity loans and lines of credit that can be used to improve the home and boost its value or be used in financial emergencies.

While renting can’t offer those long-term financial benefits, it’s cheaper to rent on a month-to-month basis, the analysis found. If you’re wondering how to save money for a down payment, renting can help you build that nest egg — but in extremely expensive or competitive markets, renting might be better for the long haul. If you’re considering buying, before entering the market, use a mortgage calculator to estimate the costs and compare mortgage rates to find the best deal.

To determine the monthly homeownership premium — the additional cost of owning instead of renting, expressed as a percentage — NerdWallet compared 2015 American Community Survey data from the U.S. Census Bureau for the median gross rent and median homeownership cost in each state and Washington, D.C. Median gross rent includes the costs of monthly rent and utilities for all kinds of rental properties, and median homeownership cost includes monthly mortgage payments, real estate taxes, insurance and utilities. This comparison doesn’t include the down payment required to buy a home, which is traditionally 20% of the home price for conventional mortgages, but is lower for FHA or VA loans.

Key takeaways

  • Owning is more expensive everywhere. Across all 50 states and Washington, D.C., it costs more each month to own a home than to rent. The median cost people pay nationwide to own a home is 54% more than the median cost to rent each month.

  • The smallest difference is still a third more to own. The state where the premium to own a home is lowest is Florida, where it costs a median of 33% more to own than to rent. The states with the next lowest premiums are Colorado (40%) and Arizona (41%).

  • In some states, the cost of owning far eclipses renting. In New Jersey, the state with the highest homeownership premium, the median monthly cost of owning is nearly double that of renting (93%). The next most expensive places to own are Rhode Island, where the median homeownership cost is 84% higher than renting, and Connecticut, where owners pay a median of 82% more than renters each month for housing.

Scroll through the table to see the data for all states and Washington, D.C.

State

Homeownership premium

Median monthly costs to own

Median monthly costs to rent

Difference

New Jersey

93%

$2,349

$1,214

$1,135

Rhode Island

84%

$1,730

$938

$792

Connecticut

82%

$2,020

$1,108

$912

South Dakota

81%

$1,225

$675

$550

New Hampshire

80%

$1,828

$1,017

$811

Massachusetts

76%

$2,048

$1,164

$884

Montana

72%

$1,316

$763

$553

Wisconsin

72%

$1,359

$792

$567

New York

71%

$2,009

$1,173

$836

Illinois

70%

$1,588

$936

$652

Nebraska

69%

$1,269

$750

$519

Maine

69%

$1,340

$792

$548

Wyoming

67%

$1,364

$815

$549

North Dakota

67%

$1,297

$775

$522

Vermont

66%

$1,530

$923

$607

Ohio

65%

$1,228

$746

$482

Minnesota

64%

$1,459

$888

$571

Kansas

64%

$1,279

$782

$497

Washington, D.C.

63%

$2,312

$1,417

$895

Iowa

63%

$1,170

$718

$452

Pennsylvania

63%

$1,414

$868

$546

Oregon

63%

$1,534

$943

$591

California

62%

$2,123

$1,311

$812

Washington

58%

$1,704

$1,080

$624

Missouri

57%

$1,200

$763

$437

Alaska

56%

$1,817

$1,163

$654

Texas

56%

$1,453

$932

$521

Kentucky

55%

$1,089

$702

$387

New Mexico

55%

$1,214

$783

$431

Alabama

54%

$1,124

$729

$395

Oklahoma

53%

$1,159

$759

$400

Louisiana

52%

$1,219

$800

$419

Utah

52%

$1,408

$925

$483

Idaho

52%

$1,170

$770

$400

Michigan

52%

$1,220

$803

$417

Hawaii

50%

$2,248

$1,500

$748

Mississippi

50%

$1,083

$724

$359

Maryland

49%

$1,909

$1,278

$631

North Carolina

49%

$1,234

$827

$407

Tennessee

49%

$1,167

$785

$382

Arkansas

48%

$1,029

$695

$334

Virginia

48%

$1,692

$1,144

$548

West Virginia

44%

$972

$675

$297

Indiana

44%

$1,089

$758

$331

Delaware

44%

$1,506

$1,049

$457

Georgia

43%

$1,299

$909

$390

South Carolina

43%

$1,168

$819

$349

Nevada

42%

$1,396

$980

$416

Arizona

41%

$1,319

$933

$386

Colorado

40%

$1,558

$1,111

$447

Florida

33%

$1,394

$1,046

$348


METHODOLOGY

NerdWallet analyzed one year of data from the U.S. Census Bureau’s American Community Survey from 2015, the most-recent data available. To determine the homeownership premium, we used the median gross rent for all rental properties and the median homeownership cost for all states and Washington, D.C., to determine a percentage that shows the added cost, as a premium, that people pay each month to own a home.

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