According to real estate site Trulia, buying a home is 23% cheaper than renting for millennials (defined as age 25 to 34) across the US.
In the 2015 report, “Should Millennials Rent or Buy?” Trulia compared the costs of owning and renting for young homebuyers in the nation’s 100 largest metropolitan areas. The real estate site looked at median home value and rent, and factored in the initial, future, and one-time costs of owning and renting. It also assumed millennials move every five years and can afford an admittedly low 10% or less down payment (20% or more is generally recommended). Read the full methodology.
It’s cheaper to buy in every metro except two: Honolulu — where it’s 5% more expensive to buy than rent — and San Jose, where it’s 2% more expensive to buy.
The best deals for young home buyers tend to be in the southern housing markets — it’s over 40% cheaper to buy in a handful of cities in Texas, Florida, and Louisiana.
In terms of major cities such as New York and San Francisco, it’s still cheaper to buy, but just barely. “Our rent versus buy metric is especially tight for young prospective buyers in California,” Trulia’s chief economist Ralph McLaughlin reports. “Orange County, San Francisco, and Oakland are the most vulnerable markets. An increase of interest rates of half a basis point (0.5 percentage points) would make the costs of buying in those markets about the same as renting.”
Here are the 10 cities where it’s significantly cheaper to buy than rent: