Buying vs. Renting in 2025: Why Homeownership Still Wins

Deciding whether to buy or rent in 2025? You’re not alone! A recent report found that in most areas of the U.S., owning a home is still more affordable than renting a three-bedroom home. While both renting and buying require a significant portion of income, homeownership remains the better long-term investment for those who can secure financing and a down payment.

Why Buying a Home is More Affordable Than Renting

- Homeownership Takes a Smaller Portion of Income – In nearly 60% of U.S. counties, the monthly costs of owning a single-family home consume less income than renting a three-bedroom property.

- Home Values Continue to Rise – While home prices have increased, so have wages in most markets. Many homebuyers are building equity instead of spending on rising rent costs.

- Rent Costs Are Climbing Faster Than Home Prices in Many Areas – In places like Houston, TX, Columbus, OH, and San Antonio, TX, rent is outpacing home prices, making ownership an even smarter move.

Regional Trends: Where Buying Makes the Most Sense

Best Areas for Homeownership:

- The Midwest and South are where buying is the most affordable, with 80% of counties in the Midwest and 60% in the South showing that homeownership is the better deal.

Cities Where Buying is the Best Option:

- Suffolk County, NY – Owning costs 59% of local wages, while renting takes 159%

- Naples, FL – Owning costs 79% of wages, renting costs 127%

- Chicago, IL – Owning costs 31%, renting costs 36%

Best Areas for Renting:

-The West Coast stands out as the one region where renting is the better financial choice. In about 80% of western counties, rent is a more affordable option than buying.

Cities Where Renting is the Better Option:

- Oakland, CA – Renting costs 48% of wages, while owning takes 87%

- Honolulu, HI – Renting costs 64%, while owning takes 103%

- San Mateo County, CA – Renting costs 31%, while owning takes 69%

Why Homeownership is Still the Smarter Move

- Equity Growth – Unlike rent, homeownership helps you build wealth over time. You’re investing in your future instead of paying your landlord’s mortgage.

- More Stability – Rents can rise unpredictably, while owning a home gives you financial stability with fixed mortgage payments.

- Tax Benefits – Homeownership can provide tax deductions that renting does not.

- Long-Term Savings – While down payments may seem like a hurdle, homeownership pays off in the long run compared to renting.

Key Takeaways

- In most of the country, homeownership is still more affordable than renting.

- The Midwest and South offer the best affordability for buyers.

- If you’re in the West, renting might be the better short-term option, but long-term homeownership still wins.

- Building equity and gaining financial stability make homeownership a smart investment.

Thinking about buying a home in 2025? Let’s explore your options and find the right mortgage solution for you!

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* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.