Why You Should Buy a House in Boston Now

Photo via Thinkstock

Most of Boston‘s editorial staffers are renters, so we’re well aware of the absurdity of this city’s rental market: Crazy high prices for mostly lousy apartments. When I moved last year, for example, I looked at a bunch of total dumps in Cambridge/Somerville/Jamaica Plain/Roslindale that were asking for nearly $2,000 a month. I may have chosen to live in those places in college—when I was totally content to find a couch on the street corner and bring it up into my apartment—but not anymore. Yesterday, real-estate website Trulia released an interesting report comparing monthly costs of renting versus owning, highlighting the craziness of Boston’s market. In Boston, Trulia calculated, the average monthly rent (which includes security deposits and insurance) is $2,256. Buying a home (including closing costs, maintenance, insurance, and property taxes), meanwhile, only costs $1,338. It’s nearly 41 percent cheaper to buy in Boston than to rent. (Looking at the data made me kind of want to move to Detroit, where you monthly home ownership costs are only $349—but then again, it’s Detroit.)

Granted, Trulia failed to include the cost of the down payment in their calculations. As they pointed out, “The big obstacle holding back renters who want to buy is the down payment—even more than getting a mortgage. And keep in mind, in the metros where the cost of buying is less than half of what it would cost to rent over the long term, it still takes years to save enough for a down payment.”

Just how long, you ask? Last month, Trulia calculated that the average Boston worker would need to save 10 percent of their paycheck for 12.1 years in order to afford a 20 percent down payment. So, start dropping money into your piggy-bank: In just a dozen years, you can really start saving some money on rent.

  • Sarah Anderson

    Hi Patrick,

    I’m a Realtor in Boston and most of my clients this summer have gone through the same sticker shock. Almost all had fall lease renewal letters that ticked up 10 to 15%! But my buyers took advantage of some great programs available right now to purchase condos or single family properties with as little as 3.5% down, which can really speed up the timeline towards making a home purchase and getting the mortgage and property tax deductions now. You can also get a down payment gifted to you. Very few first time buyers are purchasing with 20% down. In this market, that would take forever and I don’t think people should have all their savings tied up in a property. It’s a great time to buy, so I advise finding an excellent agent who focuses on the neighborhood you like and have a conversation with some lenders to see what you need to do/save to be ready to purchase in the next 12 months.
    All the best,

    Sarah Anderson
    Charlestown and Navy Yard Expert
    Hammond Residential

  • Elaine

    What is the price of the home that has the total cost you listed per month of $1,338? What area of Boston are you talking about? With the cost of a 2 bedroom condo or home over $300,000, even with a 20% down payment, I don’t see those figures working. The Trulia article didn’t mention what the home prices would be. And what about the cost of utilities which are often included in rent. I think these articles get peoples hopes up only to find when they put pencil to paper, it just doesn’t work. I speak from experience.

    • Jim

      She might be thinking about Hyde Park or East Boston. She definitely is not talking anywhere else. everything is smoking expensive.