Rent vs buy in Maryland
At today's numbers over 7 years, renting wins in 4 of the 5 cities of 50,000+, and buying wins in 1.
Rent vs buy in Maryland's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Rockville | Rent | renting wins by $91k | none in 30 years | $595,387 | $2,372 |
Sources: Zillow Home Value and Observed Rent indexes. The verdicts come from our rent vs buy method, over 7 years at 20% down.
Maryland's take
Over 7 years, renting wins in 4 of Maryland's 5 cities with 50,000+ residents. What decides your choice is the home price next to the rent. Buying wins for you in Baltimore, the 1 city where it does. There, a typical home runs $184,804, and rent comes to $1,762 a month. Over 7 years, buying comes out $54k ahead, and year 3 is when you break even.
Beyond Baltimore, home prices rise above the state's typical $425k value. A $514,771 home in Bowie rents for $2,501. There, renting leads by $50k, and break even doesn't come until year 16. In Frederick, renting holds that same $50k lead. A $456,642 home there rents for $2,155. A purchase there doesn't break even for you until year 18. In Gaithersburg and Rockville, the gap widens. In Gaithersburg, a home runs $513,386 and rent is $2,196, so renting wins by $65k, with you breaking even in year 21. Rockville is where renting leads by $91k: a home there costs $595,387 and rent runs $2,372, and break even never comes in 30 years.
Our review also covers state costs that hit your budget. Property tax costs you 0.97%, a bit more than the US rate of 0.94%. Homeowners insurance runs $1,256 a year, which saves you a little compared with the US average of $1,308. Roughly 32% of households rent, which is 765,363 homes, under the 35% US mark. The US median rent of $1,413 a month sits below the $1,705 median here, yet in most cities buying still ends up costing you more. In the last 10 years, home prices climbed 5.1% each year, so steady growth is what you'd need to offset high prices.
Our take: for Maryland, we suggest buying in Baltimore if you stay at least 3 years. We think the other 4 big cities favor renting, so you're better off renting and holding onto your savings.