You’ve been told time and time again that buying a home is a better financial option than renting. But that’s not true in several cities including St. Louis, according to real estate firm Zillow.
Despite the affordability of today’s homes, St. Louis is one of the few cities around the U.S. where renting might be a better bet, at least in the short run.
Comparing buying versus renting costs is all about identifying the break-even point. It’s a given that buying a home is more expensive upfront than renting. But at some point, owning typically becomes less expensive than renting.
The question is: how long does that take? If it takes more than a couple years before owning costs less than renting, you might be better off financially as a renter, especially if your long-term plans aren’t that certain.
Zillow did the math and factored in all kinds of possible costs, including monthly rent and mortgage payments, insurance, property taxes, maintenance and closing costs, and expected price appreciation to come up with the exact point at which buying becomes less expensive than renting.
The Gateway to the West snuck into the top 10 cities mostly buoyed by its tiniest neighborhood. If you buy a home in St. Louis, it will take 3.3 years to start saving money over renting. But in the Wydown Skinker neighborhood, where massive 1920s homes surround the city’s premier park, it will take 7.7 years for buying to overtake renting on a dollars and cents basis. Elsewhere, such as in The Ville, it will only take 1.3 years for buying to be the better option.
The average home price is $161,300, while the average price to rent is $1,098.