As home prices and mortgage rates remain stubbornly high, homeownership rates fell slightly in the second quarter of 2024 compared to the same period in 2023. New home sales in June 2024 were at their lowest levels since 2011. However, for U.S. residents who don’t want to give up on the American dream of homeownership, there are still some cities where it is actually cheaper to buy a home than to rent.
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Of course, you’ll still need to save money or put money toward a down payment if you want to buy a home. You’ll need to factor in additional costs like maintenance and repairs. But in these five southern U.S. cities, you may be able to get a monthly mortgage payment that’s lower than rent.
Methodology: To find the cheapest places to buy a home in the South, we looked up median rental prices on RentCafe.com and then looked up the median home price on Zillow.com. We calculated a 20% down payment and then used a mortgage calculator with 6.46% interest to determine the monthly mortgage payment in those cities.
Memphis, Tennessee
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Average rent: 1,703 USD
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Average property value: 150,672 USD
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20% deposit: 30,134 USD
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Average mortgage payment at 6.46%: $759
Memphis’ growing technology economy—coupled with a low cost of living that’s about 14% below the national average—makes this Tennessee city an attractive metropolis for young professionals and families.
A vibrant nightlife, temperate climate, and affordable housing market keep Memphis at the top of our list of places in the South where it’s better (and cheaper) to buy than rent.
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Baltimore, Maryland
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Average rent: $1,550
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Average property value: 188,598 USD
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20% deposit: 37,720 USD
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Average mortgage payment 6.46%: $950
Located on the border of the Mid-Atlantic states and the South, Baltimore, Maryland combines southern hospitality with cooler weather and proximity to big city life in the Northeast, including nearby Washington, D.C. Considering everything the city has to offer, homes in Baltimore are surprisingly affordable.
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Montgomery, Alabama
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Average rent: $1,200 (3 bedrooms)
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Average property value: 143,859 USD
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20% deposit: $28,772
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Average mortgage payment (at 6.46%): $724
Whether you’re planning for retirement or looking for a first home to start a family, Montgomery, Alabama offers affordable homeownership options and an overall low cost of living.
The city’s rich history, numerous parks and a solid public school system make this city attractive to many people.
Fayetteville, North Carolina
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Average rent: $1,513 (3 bedrooms)
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Average property value: $218,367
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20% deposit: 43,673 USD
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Average mortgage payment (at 6.46%): 1,100 US dollars
A military town off the convenient I-95 corridor, Fayetteville, North Carolina offers moderate temperatures compared to other regions in the South and a cost of living 20% lower than the national average.
With plenty of activities for people of all ages, a good public school system, and increasing job opportunities as companies like Amazon move to the area, Fayetteville is a great place to settle down in a first home and raise a family.
Laredo, Texas
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Average rent: $1,376 (3 bedrooms)
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Average property value: $210,620
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20% deposit: 42,124 USD
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Average mortgage payment (at 6.46%): 1,061 USD
If you want to take advantage of Texas’s benefits, including no state income tax, but can’t afford larger cities like Austin and Dallas, consider Laredo, Texas.
With a rich cultural heritage that combines Mexican and American traditions—plus a convenient location along the Rio Grande and parks that invite you to get closer to nature—Laredo can be a great city to buy a home and raise a family (or retire to a quiet life on the border).
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This article originally appeared on GOBankingRates.com: 5 Southern Cities Where It’s Cheaper to Buy a Home Than to Rent
