Buying a House Is Crazy Right Now — Consider Renting in These 10 Cities To Save Money
Plenty of people are thinking about buying a home but aren't so sure it's the right time to get into the market. And it may not be. It's no secret the housing market has gone rogue. And for some prospective homebuyers, applying for a mortgage on a home with a listing price that's increased by the thousands within just the past few months seems insane. But there's hope: Due to rising opportunities for permanent remote work, some workers are opting to leave big cities and go to outlying areas -- or even further -- to find more affordable options.
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If home prices are crazy where you live, you can choose to live in a city where rent is more affordable -- and then put the extra cash you save toward a homebuying fund. Then, you'll be in a much better financial position to get the home you want. Here are 10 cities to consider living in to save money.
Last updated: July 23, 2021
Richmond, Virginia
Richmond has a more affordable cost of living than neighboring Washington, D.C. The median listing price for a home in the nation's capital is $500,000 and a monthly mortgage averages around $2,300 a month or 25% of median household income. Richmond is in a market that favors renting, with rent commanding 21% of median household income at $1,300 per month, which is $1,000 less than the median monthly payment on a home in D.C.
Check Out: 50 Cities Where It’s Cheaper To Buy a Home Than Rent
Sacramento, California
People living in San Francisco are fleeing to Sacramento, and it's no surprise why. The median cost of a home in the coastal city is $990,000, which commands 47% of median household income and adds up to a whopping $4,660 per month median mortgage payment. Renting in Sacramento, however, only commands 27% of income and averages $1,810 per month or $2,850 less. Plus, Sacramento is still within a manageable driving distance of San Francisco.
Read: The Cost To Own a 3-Bedroom Home in Every State
Las Vegas
A popular destination for people leaving Los Angeles in search of affordable rent is Las Vegas, according to Redfin data. And with permanent remote working arrangements on the rise, a move like this may be doable for many. The median listing price for a home in Los Angeles is $1.15 million, with a whopping mortgage payment of $4,875. Compare that to Las Vegas, where median rent is $1,238 -- over $3,600 less than the almost $4,900 mortgage payment in Los Angeles.
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Riverside, California
People who want to get out of Los Angeles and have a remote working arrangement can opt to move to Riverside, which isn't so far away from Los Angeles that frequent visits are out of the question. Even though rents have increased in Riverside, the median rent in Riverside is $1,858, which is still over $3,000 less than the median mortgage payment in Los Angeles.
Research: This Is the Salary You Need To Afford the Average Home in Your State
Austin, Texas
People living in areas of the U.S. with astronomical home prices can pack up and move to the capital city of Austin, Texas, to save. The city offers an average rent cost of $1,615, which isn't as affordable as Las Vegas or Richmond but could still help you save for a down payment on a home. And in case you love the city so much you decide to stay and buy a house, the median listing price of an Austin home -- $460,000 -- is also much lower than some real estate markets in other parts of the country.
Read: 50 Cities With the Most Homes Under $100K
Raleigh, North Carolina
Raleigh-Durham, which was recently ranked as the second-most desirable place to live by U.S. News & World Report, is a family-friendly area complete with cultural offerings, over 20 craft breweries and plenty of live music. And for people who have a permanent remote working arrangement, this area could be a money-saving option due to its affordable median rent of $1,230.
See: What Homes Will Be Worth in Your State by the End of 2021
Orlando, Florida
If you have children, moving near the "most magical place on Earth" (aka Disney World), might be a dream come true for the whole family. The average cost of rent in the city is $1,550, which is lower than a mortgage payment in many other popular places across the U.S. And if you decide you want to make Orlando your forever home, the median listing price for homes there is $320,000, which is also lower than many other popular spots in America.
Explore: What Homes Will Be Worth in Your State by the End of 2021
Memphis, Tennessee
If Graceland, Beale Street and barbecue sound like your dream trifecta, you may want to move across the country to Memphis where the median rent is $1,089. Plus, Nashville is just a few hours away. Memphis is also one of those cities that's considered a "borderline" market, which means that monthly buying costs are within 5% of renting costs. In that case, you could make your homeownership dream come true even faster if you decide to save up for a while and buy a home in the city.
Check Out: These Are the 50 Best Cities for Renters
Houston
If living in an affordable major metro area with tons of amenities, including international cuisine and NASA, sounds good, Houston could be a great place to rent. The median price of rent in the city is $1,185. Houston has a population of around 7 million, made up of people from around the country and across the globe.
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Jacksonville, Florida
If coastal living is attractive to you, the city of Jacksonville, Florida, sits on the Atlantic coastline. Opportunities abound for active people and families who enjoy the outdoors, including fishing, boating, hiking and cycling. Plus the median rent is an affordable $1,164.
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Methodology: Median rent and percentages of median household income were sourced from Realtor.com on July 16, 2021.
This article originally appeared on GOBankingRates.com: Buying a House Is Crazy Right Now — Consider Renting in These 10 Cities To Save Money
