Rent vs buy in New Mexico
Over 7 years, at today's numbers, renting wins in 4 of the 4 cities of 50,000+.
Renting or buying in New Mexico's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Las Cruces | Rent | renting wins by $22k | year 13 | $287,447 | $1,439 |
Sources: Zillow Home Value and Observed Rent indexes. Verdicts come from our rent vs buy method, applied over 7 years with 20% down.
Our take on New Mexico
Over 7 years, renting wins in every one of New Mexico's 4 cities of 50,000+. The rent you pay stays low compared with home prices. A typical home in the state runs $316k, and the median rent of $1,067 a month sits well below the US median of $1,413 a month. Rent in Albuquerque runs $1,452 a month, or you pay $344,199 for a typical home. There, renting wins by $57k over 7 years. You won't break even within 30 years. A $576,890 home in Santa Fe rents for $1,956 a month. There, renting wins by $117k over 7 years, and you won't break even within 30 years.
Buying still pays off for you in 2 cities, if you stay put. Rent in Rio Rancho runs $1,867 a month, and a typical home there costs $360,463. Over 7 years, renting wins by $22k, but you break even at year 12. For you, Las Cruces looks similar. Rent on a $287,447 home runs $1,439 a month. Over 7 years, renting wins by $22k, with break-even at year 13.
Ownership costs are low, and that helps you, but they don't beat cheap rent in the early years. Property tax comes to 0.70% for you, less than the 0.94% US rate, and homeowners insurance runs $1,165 a year rather than the US figure of $1,308 a year. We also track home prices. Over the last 10 years they grew 6.5% a year, faster than the long term pace of 3.7% a year. Right now 30% of households in the state rent. That's 251,477 households, and the rate is under the 35% share in the US.
Our take: renting saves you money in all 4 big New Mexico cities over 7 years. Buy only if two things hold: your city catches up, and you stay until year 12 or year 13.