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

Portland, Oregon, cityscape

Oregon is one of the worst states to buy a home. | Travel Portland via Facebook

  • 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

snowy street in Vermont

Mortgages are expensive in Vermont. | Spencer Platt/Getty Images

  • 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

water in Washington

Although trendy, it’s not wise to buy a home in Washington. | iStock.com

  • 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

Main Street in Annapolis, Maryland

Main Street in Annapolis, Maryland | Jim Watson/AFP/Getty Images

  • 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

home for sale

Don’t buy a home in Illinois. | iStock.com

  • 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

Byers Lake, Alaska

Lots of things in Alaska are more expensive, including buying a home. | iStock.com/mbarrettimages

  • 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

beatiful sandy beach in Maui, Hawaii

Hawaii is the ninth worst state to buy a home. | iStock.com

  • 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

Providence, Rhode Island, skyline

Providence, Rhode Island | iStock.com

  • 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

New Hampshire scenery

New Hampshire is expensive to buy a home. | Darren McCollester/Getty Images

  • 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

people on California beach

Renting in California is much cheaper than buying. | Corky Buczyk/Shutterstock

  • 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

Times Square in New York City

Whether in Times Square or the Upstate, it’s not wise to buy a home in New York. | iStock.com/AndreyKrav

  • 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

Worcester, Massachusetts

Worcester, Massachusetts | iStock.com/Sean Pavone

  • 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.

the White House

Home prices in D.C. are expensive. | Karen Bleier/AFP/Getty Images

  • 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

Connecticut cityscape

You’ll save almost $1,000 if you rent instead of buy in Connecticut. | Thinkstock

  • 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

The cast of Desperate Housewives is standing together on someone's front lawn.

The discrepancy between buying and renting in New Jersey is highest. | ABC

  • 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.

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