Some concerns with renting that survey respondents highlighted include getting stuck with bad neighbors (49%) and the possibility of eviction (48%). The Department of Housing and Urban Development estimates that around 2 million renters face eviction proceedings each year, particularly in low-income areas where affordable housing is in short supply.

Our survey also found that 46% of respondents say not being able to build equity is a disadvantage of renting. Ideally, homeowners can borrow from their home equity to cover expenses or make improvements and eventually make a profit when they sell their homes. Currently, homeowners nationwide have an estimated $136,000 in home equity.

Final takeaways

So is renting or buying the better option? It depends. For those in markets where housing prices have skyrocketed, renting may be the way to go for both short- and long-term scenarios. But in many places, owners will still come out on top even with higher interest rates — especially if they intend to stay in their houses for the long term. 

Buying a house may not be the right choice for everyone financially. Potential homeowners need to base their calculations not only on where they live, but also on whether both the short- and long-term costs of homeownership make sense for them. 

Methodology

To compare how much homeowners and renters would be spending over the course of 30 years, the research team at Today’s Homeowner analyzed housing cost data from Redfin and Zillow in 97 of the largest U.S. cities. We did not include utilities in our analysis, and keep in mind that these figures are rough estimates, not exact figures.

Homeownership costs: 

• Total mortgage costs: The total mortgage payments were calculated using the average sale price of homes from July 2022 Redfin data and the average yearly interest rates from Freddie Mac. We assumed a 7% downpayment.   
• Property taxes: Data comes from the 2021 1-Year ACS. To estimate the average property tax increase by city, we estimated the annual average increase over the past 20 years to project increases over the next 30 years. 
• Maintenance costs: We averaged key home improvement costs using Angi estimates. We broke those down further into annual projects and singular projects based on how frequently the projects need to be completed.
  • Annual projects: gutter cleaning, vent cleaning, full lawn service, HVAC repair, pressure washing
  • Singular projects: roof repair, resurfacing driveway, fence installation, siding replacement, window replacement, interior painting, replace HVAC, toilet replacement, deck repair, flooring replacement, mold remediation
• Homeowners insurance: annual homeowners insurance premiums from 2022 Quadrant Information Services

Rental costs: 

• Rental housing costs: Average rent data comes from Zillow between August 2022 and July 2023. We estimated the increase in rent by calculating the average annual rental cost increases from the Department of Housing and Urban Development’s fair market rent values. We increased rent every year for 30 years by this average and added it up to calculate total rent costs. 
• Renters insurance: Annual renters insurance premiums from 2022 Quadrant Information Services  

Limitations:

Our calculations assume that property taxes and rental costs will increase steadily over the next 30 years based on estimations and historical averages. Homeownership and rental costs were calculated for a three-bedroom home. 

Survey: 

We surveyed 1,000 renters about their opinions surrounding renting versus purchasing a home. We also explored the reasons people decide to rent or buy property and when they want to become homeowners. The survey responses were collected September 13-14, 2023. Using raw survey data, we weighted responses to align with population demographics across age, gender, and income status to represent all U.S. adults. 

This story was produced by Today’s Homeowner and reviewed and distributed by Stacker Media.