Rent vs buy in Iowa
Across 11 of the state's 11 cities with 50,000+ residents, renting comes out ahead on today's figures over 7 years.
Renting or buying in Iowa's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Des Moines | Rent | renting wins by $29k | none in 30 years | $208,053 | $1,129 |
| Sioux City | Rent | renting wins by $8k | year 10 | $200,738 | $1,267 |
| Ankeny | Rent | renting wins by $74k | none in 30 years | $338,618 | $1,464 |
| West Des Moines | Rent | renting wins by $71k | none in 30 years | $320,565 | $1,353 |
| Council Bluffs | Rent | renting wins by $23k | year 16 | $227,901 | $1,335 |
Data comes from Zillow Home Value and Observed Rent indexes. Verdicts follow our rent vs buy method, which compares renting with buying, over a 7 year period at 20% down.
How we read Iowa
Compare costs over 7 years and renters come out ahead in all 11 of Iowa's cities of 50,000+. Rent in Des Moines runs $1,129 a month, and the typical home there costs $208,053. That gives renting a $29k edge. There's no break-even point within 30 years. A $338,618 home in Ankeny rents for $1,464 a month, which puts you $74k ahead as a renter.
Buying can still work out when you choose a cheaper market and stay in place. Monthly rent on a $200,738 home in Sioux City runs $1,267. Renting is ahead by $8k at year 7, though break-even comes in year 10. Waterloo sits close behind. Rent of $909 a month against a $146,001 typical home means you save $9k over 7 years renting, then break even in year 12.
The state numbers show us why. You'll pay a property tax of 1.39%, which sits well above the 0.94% rate in the US. Meanwhile, the median rent you can pay runs $972 a month, against $1,413 nationwide, and the typical home costs $237k. Homeowners insurance runs you $1,252 a year, a bit less than the $1,308 US figure. Home prices rose 5.4% a year in the last 10 years, faster than the long term pace of 3.7% a year. Just 28% of households rent in this state, under the US share of 35%.
Our take: in Iowa, renting leaves you better off unless you stay 10 years or more. Put what you save into investments and skip that 1.39% property tax.