There’s a common belief that Americans would be in a significantly better financial position if only they could afford to buy a home.
But has buying (particularly with a mortgage) and maintaining a home historically been that much cheaper than renting? If so, how much have homeowners saved on average?
To answer these questions, Creditnews Research compared the total costs of renting an average home since 2000 to the expenses of mortgaging a median-priced home in 2000 and maintaining it until 2024.
What we found puts the debate over America’s homeownership affordability in a whole new perspective.
Key findings
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Between 2000 and 2024, tenants spent a cumulative $366,480 to rent a median-priced rental home;
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Over the same period, homeownership costs—including mortgage, tax, insurance, and maintenance costs—amounted to $454,092, or 24% higher than rent;
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It was only by year 23 of homeownership that homeowners’ expenses leveled out with rent expenditures;
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The catch is that homeowners accumulated, on average, $376,722 in home equity between 2000 and 2024—thanks to a 159% jump in home prices;
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If you had chosen to mortgage a home instead of renting one in 2000, you would have saved a whopping $289,110 in housing costs between 2000 and 2024;
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The sheer homeowner savings amount to two-thirds of the net worth that the average American household peaks at.
READ MORE:
creditnews.com/research/historical-savings-from-buying-vs-renting-a-home-in-america/
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