Rent vs buy in Texas
Based on today's numbers over 7 years, renting wins in 53 of the state's 75 cities of 50,000+, 13 favor buying, and 9 are toss-ups.
Rent or buy across Texas cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Houston | Toss-up | toss-up, renting ahead by $2k | year 8 | $259,465 | $1,544 |
| San Antonio | Rent | renting wins by $10k | year 10 | $244,623 | $1,381 |
| Dallas | Rent | renting wins by $20k | year 12 | $303,442 | $1,604 |
| Fort Worth | Rent | renting wins by $17k | year 11 | $292,949 | $1,612 |
| Austin | Rent | renting wins by $111k | none in 30 years | $491,960 | $1,571 |
| Arlington | Rent | renting wins by $34k | year 16 | $306,472 | $1,468 |
| Garland | Rent | renting wins by $12k | year 10 | $280,515 | $1,560 |
| Grand Prairie | Rent | renting wins by $20k | year 12 | $312,607 | $1,673 |
| McAllen | Rent | renting wins by $8k | year 9 | $226,801 | $1,300 |
| Midland | Rent | renting wins by $27k | year 13 | $328,375 | $1,565 |
| Pearland | Rent | renting wins by $48k | year 20 | $377,993 | $1,898 |
| New Braunfels | Rent | renting wins by $34k | year 15 | $345,353 | $1,560 |
| Conroe | Rent | renting wins by $28k | year 14 | $310,592 | $1,567 |
| Allen | Rent | renting wins by $108k | none in 30 years | $487,619 | $1,734 |
| Georgetown | Rent | renting wins by $72k | none in 30 years | $419,666 | $1,596 |
| Temple | Rent | renting wins by $5k | year 9 | $243,946 | $1,383 |
| Leander | Rent | renting wins by $55k | year 21 | $420,175 | $1,897 |
| Pharr | Buy | buying wins by $7k | year 6 | $160,714 | $1,116 |
| Mansfield | Rent | renting wins by $93k | none in 30 years | $440,844 | $1,707 |
| Flower Mound | Rent | renting wins by $107k | none in 30 years | $599,753 | $2,298 |
| Galveston | Rent | renting wins by $39k | year 17 | $315,114 | $1,435 |
| Celina | Rent | renting wins by $103k | none in 30 years | $512,080 | $2,009 |
Data: the Zillow Home Value and Observed Rent indexes. Verdicts come from our rent vs buy method with 20% down across 7 years.
What Texas shows
Texas strongly favors renting, and over 7 years you save money in 53 of the state's 75 big cities. Buying comes out ahead for you in 13 cities, and 9 end in a tie. A typical home in Corpus Christi costs $222,115, while rent runs $1,422. Buying comes out ahead by $4k there, and year 7 is when it pays off. Rent in Houston runs $1,544, and on a $259,465 home you're $2k apart, with the payoff in year 8.
Where home prices climb faster than rent, renting leaves you better off. Buying in Dallas costs $303,442, or you can rent for $1,604 a month. Over 7 years, renting saves you $20k, and buying trails until year 12. In Austin, the gap is huge, with a $491,960 home renting for $1,571. By renting, you save $111k in 7 years. A purchase doesn't pay off in 30 years.
Across the state, yearly bills make buying harder for you. Property tax comes to 1.49% for you, against the US 0.94%. Homeowners insurance runs you $1,859 a year, against the US $1,308 a year. At $1,403 a month, median rent falls under the US $1,413 a month; 37% of households rent, compared with 35% nationwide. Prices rose 7.0% a year for the last 10 years, and a typical home reached $296k, yet we see those steep bills making your payoff slower.
Our take: you should rent in Texas unless the city you're in is cheap or you stay past year 10. In pricey places such as Austin, rent rather than buy and invest the difference.