As the U.S. housing market continues to shift, a recent study revealed a surprising trend in Texas: renting a home now costs more than owning one in several major cities. For renters who’ve felt priced out of homeownership, this news could signal a potential turning point and an opportunity to start building equity instead of paying more for less.
A report from GOBankingRates via Yahoo Finance examined 13 cities across Texas where the average monthly rent surpasses the cost of a typical mortgage. Using data from Zillow’s Home Value Index and the U.S. Census Bureau’s rent estimates, the analysis considered monthly costs based on a 30-year fixed mortgage with a 20% down payment at a 6.9% interest rate (as of April 2024).
Let’s break down what this means and what renters should consider moving forward.
Renting vs. Owning: Which One Is More Affordable?
In cities like College Station, Waco, and Killeen, the numbers are clear: it’s cheaper to own a home than to rent one often by $300 to $500 per month. Here are some standout cities:
| City | Avg. Monthly Rent | Est. Mortgage Payment | Monthly Savings by Owning |
|---|---|---|---|
| College Station | $1,540 | $1,056 | $484 |
| Waco | $1,371 | $958 | $413 |
| Killeen | $1,349 | $937 | $412 |
| Lubbock | $1,296 | $973 | $323 |
| Wichita Falls | $1,174 | $887 | $287 |
| San Angelo | $1,295 | $1,025 | $270 |
| Abilene | $1,245 | $983 | $262 |
Even in smaller cities like Longview and Amarillo, renting proves to be the more expensive option, which flips the usual narrative that owning is out of reach for many.
Why Is This Happening?
Several factors are contributing to this unexpected rent-vs-own gap:
1. Rent Inflation
Rental demand in Texas continues to soar due to population growth and out-of-state migration. As a result, landlords have raised prices even in traditionally affordable cities.
2. Stable Home Prices in Smaller Markets
While cities like Austin and Dallas have seen major housing price spikes, smaller markets like Waco, Abilene, and San Angelo still offer homes under or around $200,000. These prices help keep mortgage payments lower especially for buyers with good credit and a solid down payment.
3. Cooling Mortgage Rates
Though rates remain higher than pre-pandemic lows, 2024 saw a slight easing in interest rates compared to their 2023 peak, making financing more manageable for those entering the market now.
Should You Buy Instead of Rent?
If you live in one of the cities mentioned above or plan to move to one it’s worth running the numbers to see if buying a home could save you money and give you long-term financial stability.
Advantages of Owning
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Monthly savings over renting
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Equity building instead of paying a landlord
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Tax benefits (mortgage interest and property tax deductions)
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Stability in monthly payments (if you choose a fixed-rate mortgage)
But Consider These First:
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Upfront costs, including the down payment, closing costs, inspections, and moving expenses
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Responsibility for repairs, taxes, and insurance
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Job or lifestyle flexibility (buying makes short-term relocation harder)
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Credit score and debt-to-income ratio, which affect your mortgage approval
Final Thoughts: Homeownership May Be Closer Than You Think
For many Texans, homeownership may no longer be a distant dream it might actually be the smarter financial move right now. With rents rising and mortgage payments more manageable in several cities, the old rule that renting is “cheaper” doesn’t hold up everywhere anymore.
Of course, personal circumstances still matter. But if you’re financially prepared and planning to stay put for a few years, owning a home in cities like College Station, Waco, or Lubbock could not only cost you less per month but set you up for a stronger financial future.
Source: 13 Cities in Texas Where Renting Is More Expensive Than Buying a Home – Yahoo Finance