Is It Cheaper to Buy a Home With an FHA Loan or to Rent?
November 4, 2023
Is it Cheaper to Buy or Rent?
The short answer? “It depends.” The nature of your selected housing market is key. According to figures compiled by USA Today, those living in California, for example, might find it cheaper to rent than to buy.
But ask a house hunter in Chicago that same question, and you get a different answer. For example, the Chicago housing market is affected by forces including gentrification, high demand of high-cost homes, and other variables that make that housing market about (according to USA Today) cheaper per month to own than to rent.
Chicago, New Orleans, Memphis, and Cleveland were all listed by USA Today as being markets where it is cheaper to own your home than to rent it. Compare that to New York, where USA Today reports the following numbers:
“New York City has the highest home prices at $559,117. But given that rent is typically $3,068 a month, residents are better off springing for a mortgage than paying rent to a landlord...”
Where Is it Cheaper to Buy Than to Rent?
In May 2023, these housing markets were all listed in published reports, including the one by USA Today as being areas where it makes more sense to buy than to rent. If you want to buy a home in one of these locations, a FHA loan’s low 3.5% minimum down payment can be a big advantage:
- Pittsburgh
- New Orleans
- Chicago
- Cleveland
- Memphis
- Miami
- Detroit
- Oklahoma City
- St. Louis
- Tampa
- Cincinnati
- Philadelphia
- Houston
- Atlanta
Contact a participating FHA lender to learn more about low-downpayment home loans and your options for becoming a homeowner.
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FHA Loan Articles
October 16, 2021The FHA’s aim is to make homeownership more affordable and accessible for Americans, and it has been doing so for decades. It insures home loans made by FHA-approved lenders so borrowers can purchase single-family and multi-family homes in the US and its territories.
September 20, 2021A down payment is an upfront installment or part of a larger amount paid on a purchase. The remainder is paid off in separate installments, usually with interest, as part of a loan. The down payment represents your initial ownership stake in the home you continue to make payments on.
September 2, 2021For many first-time home buyers, the FHA loan is a popular option. With its lenient credit and income requirements, it appeals to young borrowers who don’t have an extensive credit history, or enough money saved up for a down payment.
August 9, 2021Many first-time homebuyers need some help understanding and navigating the ins and outs of the mortgage process, and down payments are an essential part of that. A down payment is an upfront installment made on a large purchase while the remainder is paid off with a loan.
July 30, 2021The FHA Streamline Refinance allows mortgage holders to refinance their home loan without going through the process of second appraisal. Since this is a step that was completed with the first FHA mortgage, the FHA waives it for the refinance
