Here’s What Renters & Landlords Pay Monthly To Live In The SF Bay Area

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It’s no secret that the Bay Area has some of the highest rents in the country. But it could still be cheaper than buying a house, according to the data.

Renters in San Francisco and San Jose save much more money than homeowners who pay mortgages in those cities, according to a new study from Rent.com, a real estate listing website that also publishes guides to the city. city ​​and resources for tenants.

The study, which looked at the average rents of all unit types versus median monthly mortgage payments in the same areas, found that in San Francisco, tenants spend $ 1,983 less per month than those who pay off a mortgage – the biggest difference between renting and buying. San Jose was close behind with a difference of $ 1,510.

Renters had the biggest financial advantage over buyers in Nacogdoches, Texas, where people spend $ 555 less per month each month renting – just over a quarter of the difference in San Francisco, according to figures from Rent. .com. But No.5 took it back to California, with Santa Cruz saved at $ 476 per month by renting.

But just because renting is cheaper than buying in the Bay Area doesn’t mean that either is “affordable.” In the San Francisco-Oakland-Berkeley metro area, the average rent is $ 3,218 per month. The current average monthly mortgage is $ 5,201 in San Francisco and $ 3,295 in Oakland, according to Rent.com. San José has an average monthly rent of $ 3,104, compared to an average monthly mortgage of $ 4,614.

However, given that the study looks at the average rent and median mortgages for all types of units, from studios to three-bedroom homes, there are likely exceptions to the data.

“Just because the tenants as a whole are going to save this amount of money based on what we’ve found doesn’t mean it will affect everyone the same,” said Brian Carberry, editor-in-chief of Rent.com. “It’s going to be different depending on the size,” like comparing buying a bigger house to renting a bigger apartment rather than doing the same for a studio-sized unit.

Renting is more often less expensive month-to-month than buying on the west coast than on the east or center of the country: eight of the top 20 places where rent payments are lower than mortgage payments are found in California, according to the data.

But this is far from the norm. Of the 234 regions in the analysis, paying a monthly mortgage is cheaper than renting in 215, Carberry said. So what’s going on in California?

“I think it’s really fair that house prices in California are so much higher than they are in a lot of other places,” Carberry said. “That’s not to say that there aren’t affordable housing options for buyers in California, but in a general sense, it’s just a lot more expensive to buy something in California.”

But that doesn’t necessarily mean leasing will be cheaper than buying long-term, Carberry said. Rent prices tend to rise every year as people renew their leases, he explained, while a mortgage payment is typically set over a 30-year period. This means that there is probably a breakeven point somewhere that the Rent.com study did not examine.

A similar study by mortgage website LendingTree used different methods, but also found that San Francisco and San Jose were among the top metropolitan areas in the United States where renting is cheaper than owning a home with a mortgage, after New York. The LendingTree study was based on self-reported figures from the U.S. Census Bureau’s 2019 U.S. Community Survey and calculated the average costs of owning and maintaining a home – including utilities, fees and taxes – in addition to the mortgage.

“At some point, it becomes more attractive to buy versus lease,” Carberry said. “If you only look at one year, like this year versus next year, renting is much more affordable. But in the long run, you better buy.

Rents are also rising in major Bay Area cities – San Francisco, San Jose and Oakland are all back on the rise after a pandemic crisis, according to a rent report from the Zumper ads website. When it comes to buying homes, Bay Area home buyers see more options on the market compared to last year, but these homes are more expensive than ever, according to a report from the site. Zillow Real Estate Listing Web.

But Carberry believes the gap between rents and mortgage costs will narrow over the next year as the housing market begins to cool.

“Right now the housing market is so hot, and I don’t think it’s sustainable,” he said. “I don’t think a bubble is going to burst or anything, but I think in a year or so people won’t be paying as much for their homes as they are today.”

On top of that, people shouldn’t make their buying decision purely on the basis of general data like this, he said.

“I would just like to encourage people to do their homework,” Carberry said. “Find out what you can afford and what will work for you, and think long term versus short term. “

Danielle Echeverria is a writer for the San Francisco Chronicle. Twitter: @DanielleEchev Email: [email protected]





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