Renting vs. Buying Real Estate: See the Cost Difference in These 13 Texas Cities
The decision between renting and buying a home is a big one, especially in a state where everything is bigger — like Texas. How your savings stack up when paired against rising cost of living expenses can be the difference between living paycheck to paycheck or putting money aside for a down payment.
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One of the primary advantages of renting is the lower initial cost. Typically, renters are required to pay a security deposit, which is usually equivalent to one or two months’ rent, and possibly an application fee. These upfront costs are relatively minimal compared to buying a home.
Purchasing a home, though, involves significant upfront expenses. Buyers need to have a down payment, which can range anywhere from 3% to 20% of the home’s purchase price. Additionally, buyers must cover closing costs, home inspections, appraisals and potential repairs.
Monthly rental payments are typically predictable and include the cost of living in the home and, in some cases, utilities such as water and trash removal. Over time, rent prices can increase, often annually, depending on market conditions and lease terms.
Monthly mortgage payments are generally more stable for homeowners and can include principal, interest, property taxes and homeowner’s insurance, though they can also fluctuate based on changes in property taxes and insurance premiums.
GOBankingRates recently completed a study to determine the cost difference between renting and buying based on such factors as median household income and average home values, mortgage payments or rental costs. Here are the key takeaways from these 13 cities in Texas.
Houston
Population: 2,296,253
Household median income: $60,440
Average home value: $272,144
Average monthly expenditures: $2,074
Average monthly mortgage payments: $1,611
Average monthly rent: $1,646
Homeowner monthly cost of living: $3,686
Renter monthly cost of living: $3,720
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San Antonio
Population: 1,445,662
Household median income: $59,593
Average home value: $262,088
Average monthly expenditures: $1,924
Average monthly mortgage payments: $1,552
Average monthly rent: $1,455
Homeowner monthly cost of living: $3,476
Renter monthly cost of living: $3,378
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Dallas
Population: 1,300,642
Household median income: $63,985
Average home value: $318,682
Average monthly expenditures: $2,098
Average monthly mortgage payments: $1,887
Average monthly rent: $1,760
Homeowner monthly cost of living: $3,985
Renter monthly cost of living: $3,858
Austin
Population: 958,202
Household median income: $86,556
Average home value: $544,638
Average monthly expenditures: $2,056
Average monthly mortgage payments: $3,225
Average monthly rent: $1,791
Homeowner monthly cost of living: $5,281
Renter monthly cost of living: $3,848
Fort Worth
Population: 924,663
Household median income: $72,726
Average home value: $309,932
Average monthly expenditures: $2,081
Average monthly mortgage payments: $1,835
Average monthly rent: $1,735
Homeowner monthly cost of living: $3,916
Renter monthly cost of living: $3,816
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El Paso
Population: 677,181
Household median income: $55,710
Average home value: $224,590
Average monthly expenditures: $1,878
Average monthly mortgage payments: $1,330
Average monthly rent: $1,580
Homeowner monthly cost of living: $3,208
Renter monthly cost of living: $3,458
Arlington
Population: 393,469
Household median income: $71,736
Average home value: $324,165
Average monthly expenditures: $2,085
Average monthly mortgage payments: $1,920
Average monthly rent: $1,708
Homeowner monthly cost of living: $4,004
Renter monthly cost of living: $3,793
Corpus Christi
Population: 317,804
Household median income: $64,449
Average home value: $224,964
Average monthly expenditures: $1,878
Average monthly mortgage payments: $1,332
Average monthly rent: $1,361
Homeowner monthly cost of living: $3,210
Renter monthly cost of living: $3,239
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Plano
Population: 284,948
Household median income: $105,679
Average home value: $533,002
Average monthly expenditures: $1,959
Average monthly mortgage payments: $3,156
Average monthly rent: $1,867
Homeowner monthly cost of living: $5,115
Renter monthly cost of living: $3,825
Lubbock
Population: 258,190
Household median income: $58,734
Average home value: $210,420
Average monthly expenditures: $1,868
Average monthly mortgage payments: $1,246
Average monthly rent: $1,396
Homeowner monthly cost of living: $3,114
Renter monthly cost of living: $3,264
Laredo
Population: 255,293
Household median income: $60,928
Average home value: $210,062
Average monthly expenditures: $1,891
Average monthly mortgage payments: $1,244
Average monthly rent: $1,205
Homeowner monthly cost of living: $3,135
Renter monthly cost of living: $3,096
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Irving
Population: 254,962
Household median income: $76,686
Average home value: $357,191
Average monthly expenditures: $2,066
Average monthly mortgage payments: $2,115
Average monthly rent: $1,768
Homeowner monthly cost of living: $4,181
Renter monthly cost of living: $3,834
Garland
Population: 244,026
Household median income: $71,044
Average home value: $310,763
Average monthly expenditures: $2,102
Average monthly mortgage payments: $1,840
Average monthly rent: $1,604
Homeowner monthly cost of living: $3,942
Renter monthly cost of living: $3,706
Methodology: For this study, GOBankingRates found the average cost of living for homeowners and renters in the USA’s largest 100 cities by population. First, GOBankingRates found the top 100 cities by population, as sourced from the U.S. Census American Community Survey. For each city, a number of factors were found, including: total population, total households and household median income, all sourced from the U.S. Census American Community Survey. The cost of living indexes were sourced from Sperling’s BestPlaces, and the national average expenditure costs for all residents were used, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey for all residents. The single family home value was sourced from the Zillow Home Value Index, and by assuming a 10% down payment and using the national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage rate can be calculated. The average rental cost was sourced from the Zillow Observed Rental Index for each city. The average rent cost and average mortgage cost can be used with the average expenditure cost to calculate the total cost of living for renters and homeowners. The cities were ranked to show the cheapest to most expensive cities, then sorted by total population to show the cost of living for homeowners and renters in the top 100 cities by population. All data was collected on and is up to date as of July 15, 2024.
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This article originally appeared on GOBankingRates.com: Renting vs. Buying Real Estate: See the Cost Difference in These 13 Texas Cities
