Rent vs buy in New York
With today's numbers over 7 years, 9 of the 13 cities of 50,000+ favor renting, 3 favor buying, and 1 is a toss-up.
Renting or buying in New York's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| New York City | Toss-up | toss-up, buying ahead by $5k | year 7 | $825,854 | $4,089 |
Data come from the Zillow Home Value and Observed Rent indexes. Each verdict applies our rent vs buy method with 20% down across 7 years.
The New York view
Over 7 years, 9 of the 13 biggest cities in New York favor renting. Buying beats renting in only 3 cities, while New York City comes out a toss-up, $5k apart. A $825,854 home there breaks even at year 7, against monthly rent of $4,089. To come out ahead by buying, what you need is a cheaper spot, such as Buffalo. A typical home in Buffalo costs $244,068 while rent runs $1,421. If you buy there, you'll come out $15k ahead and break even in year 5. Apart from that city, only Syracuse and Utica let you beat renting.
In other places, high home prices outrun what you'd pay in rent. A $941,136 home in New Rochelle rents for $2,995 a month. Over 7 years, renting saves you $197k, and buying never breaks even within 30 years. In Yonkers and Schenectady, you won't reach break even in 30 years either.
The state numbers explain why buying is hard. A $525k typical home value comes with a 1.55% property tax, well above the 0.94% US rate. Homeowners insurance runs $1,236 a year for you, compared with $1,308 a year nationwide, so you save a bit. Over the last 10 years, home prices grew 6.8% a year. Still, 46% of households rent here compared with 35% nationwide.
Our take: you should rent where home costs won't catch up, in the pricey cities. To buy, we'd choose either a cheaper upstate city, or stick with New York City for 7 years.