WEST PALM BEACH, Fla. — WPTV has stayed by your side helping you navigate the cost of living in South Florida.
We have been listening to homeowners and renters in search of solutions as they contemplate whether they're better off renting or buying in today's economy.
WATCH BELOW: 'Renting when we first moved here made sense,' Susanna Zurecka tells WPTV
WPTV's Joel Lopez searched for the answers and explored the latest findings from a study by Realtor.com, which revealed that renting could save you nearly $1,000 more a month compared to buying a home.
The study primarily focused on starter-level homes, making direct comparisons between the monthly costs of renting and purchasing similar-sized units.
To gather local insights, WPTV took to Clematis Street in downtown West Palm Beach, asking residents about their housing choices.
One of the people we encountered was Mathew Hancock, who opted to rent after relocating from Miami three years ago.
"Right now, the interest rates are just a bit too high, and I just didn't want to be tied down for the next 30 years or however long it may be," Hancock explained. "Renting adds the fluidity to move wherever I want."
He shared that he pays $2,400 a month on rent.
"When you were looking at houses to possibly buy, was there anything close to what you would've paid monthly?" WPTV's Joel Lopez inquired.
"Not in the area I wanted, and anything I did want was in a building where there was a lot of fees involved," Hancock responded.
We also met Susanna Zurecka, who moved from Michigan within the last year and also chose the rental path.
"We're paying a little bit over $5,000 (a month); that's with rent, utilities, water, all of that," Zurecka stated. "It is a two-bedroom, two-bath; it's pretty big for that apartment complex, brand new, they opened it in August of last year."
Now, Zurecka is taking her first step into homeownership, sharing that she just closed on a house in Boynton Beach.
"Renting when we first moved here made sense, because we didn't know if we were going to stay in the area, if we were going to move," she explained. "Now that we know we're going to stay in the area, buying made more sense, because we wanted that money to go into the home so that we could see it again."
However, Zurecka acknowledged that the costs would be higher now that she has purchased a four-bedroom, three-bath home with two stories and a pool.
"Have you factored in what your monthly fees will look like now owning a home?" Lopez asked her.
"Yes, they look to be about the same, a little more expensive with the mortgage and everything, but very, very similar to our rent," Zurecka replied.
WPTV analyzed the details from Realtor.com's study, which specifically examined monthly expenses for starter-level homes, including 1 and 2-bedroom units and studios.
The study found that while rents are decreasing, home prices continue to increase nationwide.
To offer further expertise, we consulted with Danielle Hale, the chief economist at Realtor.com.
She emphasized a crucial question for potential buyers: how long do you plan to stay in a location?
"You have to be in a home for a really long time in order for buying to end up being a better financial decision," Hale noted. "If you're only going to be there a couple of years, in that case, take the savings up front as a renter and then you can save up as a down payment."
To calculate the monthly expense of purchasing a home, the study first identified the median list price for homes with 0-2 bedrooms (commonly referred to as starter homes).
Considering that first-time buyers typically make smaller down payments, they set a down payment of 9% and utilize the 30-year fixed mortgage rate for that month to compute the monthly mortgage payment.
The study then factored in the average costs of HOA fees, taxes, and homeowners' insurance at the metropolitan level and compared the buying costs against the median rent in each metro area, concentrating on the differences in monthly expenses.
The findings revealed that renting would save individuals an average of $908 a month compared to buying a starter home.
Although these numbers lean toward renting being the more economical choice in the short term, Hale added.
"That doesn't mean that it might not make sense for individuals to buy a home if they're thinking the really long term and thinking about the equity benefits of buying a home," she said.
As the national housing market begins to balance, with negotiating power becoming more equitable between buyers and sellers, Hale noted that Florida is slowly shifting towards a buyer's market.
"We're starting to see conditions shift; rents are cheaper today, but buyers are getting more negotiating power back in the housing market, particularly in Florida," she explained. "While it's still pretty expensive to buy, you may find success asking for price cuts or contingencies on an offer that you may not have been successful at submitting in the past couple of years."
If you're looking to assess your financial situation regarding renting versus buying, Realtor.com offers a convenient calculator to help you understand what costs may look like for you.