Rent vs buy in Indiana

The take on Indiana

In Indiana's 21 largest cities, renting beats buying in 13 of them over 7 years. Buying takes the lead in 5 of them, and 3 are toss ups. What settles it is how home prices compare to what you pay each month in rent. Take Indianapolis: a home there costs $227,445, or you pay $1,375 in rent each month. Since the gap is $2k and you break even in year 8, we call that a tie. A $245,193 home in Fort Wayne rents for $1,257, so renting saves you $20k and you break even in year 14.

The gap gets wider when you look at the extreme cases. Rent for $1,864 in Carmel, and the home is worth $575,492. Renting puts you ahead by $143k, and break even doesn't come within 30 years. Now look at Hammond, where buying costs $176,621 and renting costs $1,512. There buying wins by $37k and pays off in year 3.

The state numbers help when you stay longer. A typical home is worth $257k. Over the last 10 years, prices have grown 7.2% a year, up from a long term pace of 3.7% a year. Fewer households rent than the 35% US share, at only 29%. Buying brings a 0.74% property tax and $1,201 a year for homeowners insurance, under US averages of 0.94% for property tax and $1,308 for insurance. Even so, median rent is $1,062 a month compared with $1,413 nationwide, which leaves you cash to invest.

Our take: while rent stays low, you're better off renting across most of Indiana. Buy only when the city is cheap, or when you stay past your break even year.