Construction Coverage, an online insurance and financial resource, published last month its analysis of whether it’s cheaper to rent or buy in major U.S. markets. Nationally, it’s about 20% more expensive to own a home than to rent in the majority of the U.S.; however, that figure is astronomically higher in Austin.
It is 117% more expensive to own a home than to rent in Austin, according to the report. It marked the largest cost gap between renters and homeowners among Texas’ major cities, the report revealed, with the majority of its Lone Star neighbors hovering closer to national figures.
Dallas homeowners can expect to pay roughly 29.3% more compared to renters, while Fort Worth’s homeowners cough up about 30.7% extra. In the Alamo City, San Antonio homeowners pay 24.7% more, while that figure drops to 13.8% in Houston. Frisco was the sole Texas city to surpass Austin’s measures, with homeowners forking up 150% more than renters.
Historically, homeownership provided more robust cost-saving opportunities and autonomy for owners compared to renters; however, Construction Coverage’s analysis noted a market shift around 2022 that flipped the script.
“A combination of soaring home prices and rapidly rising interest rates made renting the more affordable option in most markets,” the report read. “Mortgage rates have more than doubled since reaching record lows in January 2021, and while home price growth has slowed, the median home price remains approximately 33% higher over the same period.”
Unsurprisingly, the most expensive markets for homeownership in the country lie along the West Coast, with Palo Alto, California, clocking in the largest price gap at a staggering 463.9% increase in monthly homeowner costs compared to renter expenses.