Five Southern cities where it's cheaper to buy a home than rent

As home prices and mortgage rates continue to challenge would-be buyers, some US cities still offer the American dream of homeownership at a lower cost than renting. In five Southern cities listed by GOBankingRates, purchasing a home can be more affordable than renting, even amid current economic conditions.

1. Memphis, Tennessee

Memphis stands out for its affordability and growing tech economy. With an average rent of $1,703, compared to a home value of $150,672, buyers can secure a mortgage payment of just $759 after a 20% down payment. Memphis offers a vibrant nightlife, a temperate climate, and a cost-of-living 14% below the national average. These features make it a prime location for young professionals and families.

2. Baltimore, Maryland

Baltimore, located on the border between the mid-Atlantic and the South, offers a unique mix of Southern hospitality and proximity to major Northeastern cities like Washington, D.C. With an average rent of $1,550 and a median home value of $188,598, homebuyers can expect a mortgage payment of around $950 after a 20% down payment. The city’s affordable housing and rich cultural offerings make it a viable option for those seeking more value for their money.

3. Montgomery, Alabama

Montgomery, the capital of Alabama, is an ideal choice for retirees and families alike. The city’s average rent for a three-bedroom home is $1,200, while the average home value is $143,859. A 20% down payment results in a mortgage payment of just $724, making homeownership an attractive option. With its rich history, abundant parks, and solid public schools, Montgomery offers a low cost -of-living that appeals to a wide range of residents.

4. Fayetteville, North Carolina

Fayetteville, known for its military presence and location along the I-95 corridor, offers a balance of affordability and convenience. The city’s average rent for a three-bedroom home is $1,513, while the median home value is $218,367. After a 20% down payment, homeowners face a mortgage payment of about $1,100. With a cost-of-living 20% lower than the national average and growing job opportunities, Fayetteville is a superb place for families to establish roots.

5. Laredo, Texas

For those seeking the benefits of Texas living without the high costs of cities like Austin or Dallas, Laredo presents a fascinating alternative. The city offers an average rent of $1,376 for a three-bedroom home, while the median home value is $210,620. After a 20% down payment, the average mortgage payment is $1,061. Laredo’s rich cultural heritage, proximity to the Rio Grande, and access to nature make it an attractive choice for buyers looking to settle down or retire.

These cities show that despite the challenges in the housing market, affordable homeownership is still achievable. Potential buyers should consider the long-term benefits and financial advantages of owning a home in these cities.

Do you know other cities where it’s cheaper to buy a home than rent? Let us know in the comments below.