On paper, owning a home is almost always more expensive than renting — about 14% more, on average, after factoring in expenses like insurance, taxes, and upkeep.
But the difference has grown much more extreme in recent years as just about all homeownership costs have ballooned.
How extreme? Exact cost estimates vary, but recently the premium for homeownership has been at least 35% over renting, a level that’s near historical highs and is likely to persist.
“We’re well, well beyond what the typical historical difference is if you were to buy an entry-level home versus rent a starter home,” said Rick Palacios Jr., director of research at John Burns Research and Consulting. “I think that’s a big part of why you see the resale market in a recession.”
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