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-down payment home loans and your options for becoming a homeowner.
------------------------------
RELATED VIDEOS:
You're Almost There When You Get Your Loan Approval
Learn About the Mortgage Insurance Premium (MIP)
Pre-approval Starts the Mortgage Process
FHA Loan Articles
June 30, 2026FHA loans offer low down payment options and more forgiving credit requirements for borrowers who may not qualify for a conventional mortgage or need to save more money out of pocket at the front end of the mortgage. But even with more forgiving credit requirements, some borrowers are tempted to omit certain debt information from their home loan applications. What does it mean to conceal a debt or financial situation from your loan officer?
June 30, 2026Some borrowers start working on their credit scores but get impatient with the process because they can't predict when their efforts will change their FICO scores. How long does it take for your FICO scores to update when you pay off a loan, reduce your credit card balances, or take other steps to make yourself a better credit risk? The short answer is that credit reporting procedures are not standardized, and it may take more time than you realize to get those positive credit actions added to your credit report.
June 29, 2026Mortgage interest rates are "moving targets" shaped by national economic trends and the borrower's specific financial profile. What is your FHA loan interest rate? Much depends on the financial data you bring to the table. Lenders set interest rates daily based on a snapshot of market conditions, but the rate ultimately offered also reflects risk, equity, and the lending institution's internal operational costs.
June 28, 2026An FHA appraisal differs from a conventional appraisal. While the goal of a conventional appraisal centers on market value, the FHA appraisal also focuses on the buyer's safety and soundness. FHA lenders select the appraiser, not the home buyer.
June 24, 2026FHA loan closing costs vary by property price and geographic location, rather than by a single nationwide flat fee. Total settlement charges combine percentage-based fees, local government taxes, and marketplace service costs. If you are new to buying a home, you'll want to get familiar with the closing cost issues discussed here to avoid budgetary surprises later on.
