Rent vs Buy in Maryland

Renting vs buying in Maryland: common questions

Which parts of Maryland favor renting over buying right now?

Baltimore, the one Maryland city we analyze, is a close call. The answer there depends on how long you stay and how much you put down.

Is buying a home in Maryland a better long-term investment than renting?

Over 20 years, buying leaves you wealthier than renting and investing the difference in all 1 Maryland city we model. Where buying does catch up, the typical break-even point is about 12 years. That result depends on the assumptions: 20% down, a 7% 30-year mortgage, 3% a year home appreciation and rent growth, and a renter who invests every dollar saved at 7%. A lower mortgage rate, faster appreciation, or a renter who spends the savings all tilt the answer toward buying.

How do monthly rents compare with mortgage payments in Maryland?

The median rent across our Maryland city is $1,737 a month. Owning the median home costs about $1,296 a month with 20% down at 6.5%, counting principal, interest, property tax, insurance and maintenance. Owning costs more per month than renting in 0 of 1 city. A higher monthly cost does not settle the question, because part of each mortgage payment builds equity.

Do current mortgage rates make buying less attractive than renting in Maryland?

Rates matter a lot. In Baltimore, owning the median home ($182,779) costs about $1,296 a month at 6.5% and about $1,394 at 7.5%, a difference of $98 every month against a median rent of $1,737. Each point of rate moves the break-even point by years, so rerun the numbers with the rate you are actually quoted.

What should you weigh when deciding between renting and buying in Maryland?

Four things do most of the work. First, how long you will stay: buying rarely wins under five years because of closing and selling costs. Second, the local price-to-rent ratio, which runs from 8.8 to 8.8 across our Maryland city. The lower it is, the better the case for buying. Third, property tax, which averages 1.09% of home value a year in these city. Fourth, what you would do with the down payment if you kept renting.

Where can I find data comparing renting and buying costs across Maryland?

This page compares 1 Maryland city side by side using Zillow home values and rents, Census income data and local property tax rates. Each city has its own page with monthly cost breakdowns, a break-even year and 10 and 20 year wealth projections, and the rent vs buy calculator lets you change every assumption.