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Cost to Buy vs Rent in 10 Michigan Cities

Grand Rapids Michigan Skyline

Unlike Arizona, Texas, and Florida, it’s cheaper to buy than rent a single-family residence in three of the ten cities analyzed.

And this is assuming conservative buying parameters: paying 5% down and including estimated private mortgage insurance (PMI), property taxes, and homeowner’s insurance. See the full methodology at the end of this article.

While low prices don’t always equate to value, Michigan does seem to be a place to explore if you want to become a homeowner. Compared to the coasts, this state offers ultra-affordable homeownership in many areas.

Monthly Cost to Buy vs Rent

1. Detroit -$738
2. Grand Rapids +$167
3. Ann Arbor +$690
4. Lansing -$281
5. Warren +$428
6. Kalamazoo +$129
7. Flint -$260
8. Saginaw +$145
9. Jackson +$351
10. Holland +$461

1. Detroit

Home Price

$64,273

Full Payment

$703

Rent

$1,441

Cost Difference to Buy

-$738

Detroit is in a league of its own when it comes to the buy-vs-rent differential. Renting is twice as expensive as owning. And with revitalization efforts in the works, a home purchase here could prove a shrewd investment.

2. Grand Rapids

Home Price

$256,813

Full Payment

$2,142

Rent

$1,975

Cost Difference to Buy

+$167

Expensive for Michigan (but 61% of the U.S. median), Grand Rapids home prices require a full payment of over $2,100. Still, this is just $167 more than it costs to rent in the city.

3. Ann Arbor

Home Price

$509,206

Full Payment

$4,334

Rent

$3,644

Cost Difference to Buy

+$690

Ann Arbor is the most expensive Michigan town on our list. With home prices over half a million dollars, this market is in stark contrast to Detroit and others in the state. Yet, high prices could indicate high demand and even more home appreciation in the future.

4. Lansing

Home Price

$140,974

Full Payment

$1,348

Rent

$1,629

Cost Difference to Buy

-$281

It will cost you nearly $300 less per month to own than rent a home in Lansing. While rents are relatively high, buying a home is likely more affordable for those who can come up with 5% down plus closing costs, or get down payment assistance and seller concessions.

5. Warren

Home Price

$192,459

Full Payment

$1,728

Rent

$1,300

Cost Difference to Buy

+$428

The automotive industry drives (pun intended) the local economy of Warren, which isn’t surprising considering it’s just 15 miles north of Detroit. While the U.S. auto industry has seen better days, it still provides plenty of employment opportunities in towns like Warren.

6. Kalamazoo

Home Price

$215,578

Full Payment

$1,831

Rent

$1,702

Cost Difference to Buy

+$129

Buying a home in Kalamazoo won’t break the bank. In fact, it will set you back only $129 more per month than renting a similar home.

7. Flint

Home Price

$55,862

Full Payment

$772

Rent

$1,032

Cost Difference to Buy

-$260

Flint is another outlier in the U.S. as far as home prices. Many people remember the Flint water crisis between 2014 and 2016 in which high lead levels were found in public water. While this may be contributing to the city’s low home prices, the University of Southern California reports that 95% of the offending infrastructure has been updated.

8. Saginaw

Home Price

$111,939

Full Payment

$1,098

Rent

$953

Cost Difference to Buy

+$145

This city of about 44,000 offers affordable home prices for just about any budget. It could cost about $150 more each month to buy a home than rent.

9. Jackson

Home Price

$167,606

Full Payment

$1,468

Rent

$1,117

Cost Difference to Buy

+$351

While Jackson home prices are affordable, renting is considerably cheaper in this town. This area could provide an affordable place to rent while saving up to make that first home purchase.

10. Holland

Home Price

$323,360

Full Payment

$2,553

Rent

$2,092

Cost Difference to Buy

+$461

One of the more spendy towns on the list is Holland. But it was Midwest Living’s Best Small Town of 2023 and features beaches, tulip festivals, and outdoor activities for all seasons. Owning a home here could be worth the extra $461 per month.

Get Pre-Approved for Your Michigan Home

Homes in Michigan are in a range of prices affordable to just about any budget. See what home price you qualify for by requesting your pre-approval from a reputable lender.

Methodology

To compare the costs of buying versus renting in 10 Michigan cities, we started with typical home prices as reported on the Zillow Home Value Index (ZHVI) Single-Family Home Time Series for November 2023. We assumed a 5% down payment, the typical requirement for first-time buyers. We then calculated the monthly payment on a 30-year fixed mortgage using a 6.845% rate, the average rate at the time of data collection as published on Optimal Blue Mortgage Market Indices for a buyer with less than 20% down and a 700 FICO score. We added PMI costs per rates from mortgage insurance provider MGIC. Then we added annual homeowner’s insurance premiums as reported by Policygenius and property tax data from Roofstock and the U.S. Census Bureau. We assumed zero HOA dues. We compared this total housing payment with rent data from the Zillow Observed Rent Index (ZORI) Smoothed Single Family Residence Time Series except when no data was available, in which case we searched for current rent statistics on Zillow’s site. City selection was based on the highest population except where it made sense to bypass a suburb of a major city to highlight one in a different area.

About The Author:

Tim Lucas spent 11 years in the mortgage industry and now leverages that real-world knowledge to give consumers reliable, actionable advice. Tim has been featured in national publications such as Time, U.S. News, MSN, The Mortgage Reports, My Mortgage Insider, and more.

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