This Is the No. 1 Worst State to Buy a Home
There’s lots of debate around whether it’s better to rent or buy a home. Do the financial benefits outweigh the added expenses of homeownership? Or are weekends free of maintenance repairs worth throwing your paycheck in the complete opposite direction of home equity.
The majority of Americans own their homes (63.6%) while the rest choose to rent. Some might say renting is a waste of money, but new research shows these renters might be on to something: increased savings.
HowMuch.net recently collected data to compare the median monthly mortgage payment with the median monthly rent payment in each state. From there, it determined the renting verses buying price gap to help decide where making such a big investment would be worth it.
So just in case you were on the white picket fence about whether to buy a home, here’s a heads up: In some states, it’s vastly more expensive to buy than rent. The price gap speaks for itself. Here are the 15 worst states to buy a home.
15. Oregon
- Median monthly mortgage payment: $1,534
- Median monthly rent: $943
- Price difference: $591
With its progressive laws and trendy millennial lifestyle, Oregon is, economically, one of the fastest growing states in the country. But according to HowMuch.net, foregoing a rental agreement in the Pacific Northwest will set you back a sizeable chunk of change each month, making it one of the worst states to buy a home.
Next: A quaint New England State
14. Vermont
- Median monthly mortgage payment: $1,530
- Median monthly rent: $923
- Price difference: $607
Buying a home in a quaint New England state, such as Vermont, is appealing for many people. However, when we consider the price between monthly rental and mortgage payments, it’s clear renting a home here is the cheaper option.
Next: Washington
13. Washington
- Median monthly mortgage payment: $1,704
- Median monthly rent: $1,080
- Price difference: $624
Washington is the second state in the Pacific Northwest on our list to score dismally on median home payments. Buying a home in Washington will set you back about $624 more than it would to rent, according to HowMuch.net’s report.
Next: Homeowners here pay almost $2,000 per month
12. Maryland
- Median monthly mortgage payment: $1,909
- Median monthly rent: $1,278
- Price difference: $631
Homeowners in Maryland pay nearly $2,000 a month on their mortgage. Compare that to a much more reasonable median rental rate, and Maryland becomes the 12th worst state to buy a home in the U.S.
Next: Illinois
11. Illinois
- Median monthly mortgage payment: $1,588
- Median monthly rent: $936
- Price difference: $652
Residents who rent in Illinois are saving thousands per year by putting off homeownership. So if your American dream includes a location in Chicago, you might want to reconsider dropping by all those open houses for a bit.
Next: Alaska
10. Alaska
- Median monthly mortgage payment: $1,817
- Median monthly rent: $1,163
- Price difference: $654
Almost everything in Alaska is more expensive, including monthly mortgage payments. There’s over a $650 price difference in renting verses buying out in The Last Frontier.
Next: Hawaii
9. Hawaii
- Median monthly mortgage payment: $2,248
- Median monthly rent: $1,500
- Price difference: $748
Outside of the Lower 48, residents can expect certain expenses to dig a deeper hole than those who reside within the continental U.S. But if island life is for you, consider renting first. Hawaii ranks highest in cost of living and as the ninth worst state to buy a home.
Next: Rhode Island
8. Rhode Island
- Median monthly mortgage payment: $1,730
- Median monthly rent: $938
- Price difference: $792
The Northeast is no stranger to high costs of living, and Rhode Island has no interest in bucking the trend. Home prices here are steep. HowMuch.net tells us it’s nearly $800 per month cheaper to rent than buy in Rhode Island.
Next: The first state on our list to crack the $800 price difference.
7. New Hampshire
- Median monthly mortgage payment: $1,828
- Median monthly rent: $1,017
- Price difference: $811
We won’t travel far to find the seventh worst state to buy a home. New Hampshire residents spend a median amount of $1,828 on their mortgage and about $1,017 on rent. With such a large price gap, there’s a possibility for homebuyers to spend thousands more per year than savvy renters.
Next: California
6. California
- Median monthly mortgage payment: $2,123
- Median monthly rent: $1,311
- Price difference: $812
California has the fourth highest median mortgage payment of all the states on this list. Although rental prices are also steep, it’s still significantly cheaper to rent than buy, and budget-conscious residents should take note.
Next: New York
5. New York
- Median monthly mortgage payment: $2,009
- Median monthly rent: $1,173
- Price difference: $836
Whether you live in the Adirondacks, Hudson Valley, or the Big Apple, choosing to buy a home rather than rent your next dwelling in New York will cost you. It’s about $836 more per month to buy than rent, according to HowMuch.net.
Next: Massachusetts
4. Massachusetts
- Median monthly mortgage payment: $2,048
- Median monthly rent: $1,164
- Price difference: $884
Buying a home in Massachusetts would be unwise. The peace of mind that comes with not having to shovel snow from your own driveway every winter should be enough to tip the scales in the rental direction. But if not, maybe the median monthly savings of $884 per month will do the trick.
Next: Washington, D.C.
3. Washington, D.C.
- Median monthly mortgage payment: $2,312
- Median monthly rent: $1,417
- Price difference: $895
The nation’s capital is no stranger to any “best of” and “worst of” lists. When it comes to cost of living, Washington, D.C., is one of the biggest money pits in America. But locals can ease the pain by renting rather than buying their home, saving hundreds of dollars monthly.
Next: Connecticut
2. Connecticut
- Median monthly mortgage payment: $2,020
- Median monthly rent: $1,108
- Price difference: $912
Just like many of its neighbors, Connecticut has some of the highest mortgage payments in the country. But the median monthly rent is actually pretty reasonable. Therefore, Connecticut is the second worst state to buy a home in the U.S.
Next: The worst state to buy a home
1. New Jersey
- Median monthly mortgage payment: $2,349
- Median monthly rent: $1,214
- Price difference: $1,135
With an astonishing $1,135 per month price difference between renting and buying a home, New Jersey ranks as the absolute worst state in the country to buy a home. In fact, residents who decide to own homes in this state would pay around $13,620 more per year in housing costs.
Follow Lauren on Twitter @la_hamer.
