Buying a home in some popular Florida cities is now cheaper than renting — as mortgage rates drop and markets cool

Finally a loan?

With mortgage rates at their lowest level since early 2023 and the nationwide housing inventory up 22% from a year ago, it may be time for renters spooked by the market in Florida and other vacation destinations. The Sun Belt should consider getting on the property ladder, experts say.

New analysis released by Zillow Home Loans suggests a return to a more buyer-friendly climate in 22 of the 50 largest metropolitan areas in the United States, including the wildly popular Miami and Tampa regions.

In these cities, owning your home may once again make more sense than renting, the researchers said.

The average monthly rent in the U.S. right now is $2,063 a month — plus the average mortgage payment of $1,827, which means the typical buyer will save about $236 a month by doing this.

And while the Sunshine State definitely made the list of desirable destinations, New Orleans beat out every other major city in the country — potential Big Easy buyers can currently save up to $450 a month by getting a mortgage, the data showed.

In Miami, the average savings would be $314, compared. In Tampa, $191.

The cities further north that offered their own substantial prices were Chicago, Pittsburgh, and Memphis.

The Big Apple even made the grade, though cost-conscious Gothamites will save far less — average rents of $3,471 and mortgages of $3,399 mean a benefit of just $72, enough to cover a modest bill.

Zillow’s number crunchers assumed a 20% down payment, an average 6.5% interest rate and a 30-year fixed mortgage.

“This analysis shows that homeownership may be more attainable than most renters think,” Zillow Home Loans senior economist Orphe Divounguy said in a written statement.

“Coming up with the down payment is still a big hurdle, but for those who can make it work, home ownership can come with lower monthly costs and the ability to build long-term wealth in the form of home equity – something that you lose it. as a tenant

“With mortgage rates coming down, it’s a good time to look at how your affordability has changed and whether it makes more sense to buy than to rent,” Divounguy explained.

Rents are leveling off after pandemic-era market changes. However, the average rent is 3.4% higher than in 2023 and almost 34% more expensive than at the start of 2020 – with no guarantee that prices will not rise again, experts warned.

On the other hand, Zillow reported, 1 in 4 US sellers are now lowering prices to accommodate a softening market.