Looking for a rent vs buy calculator for Denton Texas? You’ve come to the right place. Denton Texas can be a great place to buy or rent a home. You can find affordable housing for purchase, as well as options for single family leases. Denton Texas also has a number of apartment developments near the University of North Texas and Texas Woman’s University.
To help you with your Denton Texas rent vs buy decision here are some calculations for housing costs in the Denton area. DFW area home prices have been on the rise, and the affordability equation may not be perfectly clear until you look at all of your options. You can see my charts on Denton TX home prices to see how the market has been performing.
Running the Numbers on Denton Housing Costs
2024 data for closed single-family leases shows an average lease price of $2,231 per month. The average size 3-bedroom rental home was approximately 1783 square feet. Let’s see how the $2231 lease price compares with the monthly cost of the average 3-bedroom Denton TX single-family home sold in September 2024 of $360,942.
- $1825 – Principal and Interest on $288,754 mortgage (20% down payment, 6.5%, 30-yr fixed)
- $485 – property taxes ($5,815 annual bill with your $100,000 homestead exemption)
- $150 – hazard insurance (o.5% of property value annually)
- $ 50 – homeowners association ($600 in annual HOA dues)
- $ 100 – miscellaneous repairs
- $2,610 – Total Estimated Monthly Expense for Ownership
Even if you strip out the $100 per month allowance for miscellaneous repairs, the cost of buying a comparable home in Denton Texas is higher than the cost of renting. This is not surprising considering the rapid increase in home prices seen in the DFW area during the pandemic housing frenzy. Home price inflation has exceeded rent inflation in most DFW submarkets.
Housing Affordability is a Challenge for Many Buyers
The Atlanta Fed’s Home Ownership Affordability Monitor has a pretty decent breakdown of the real costs of buying a home in the DFW area.
Note! Third party aggregator sites often publish rent vs buy calculations using what is often flawed methodology. It’s important to take any rent-vs-buy study with a grain of salt, particularly if you can’t see all of the underlying assumptions or methodology used to calculate the numbers. Many real estate industry websites make buying a home look more affordable than it really is. Consider the source and what they are selling.
Due Diligence is Your Friend
I would encourage any prospective home buyer or renter to do their own research and crunch the numbers, paying particular attention to the property tax obligations for local homes. While Texas does not have a state income tax, we do have property tax rates which are far higher than the national average. That remains true even after the property tax compression passed by the state legislature in 2023.
Real estate is always local, so it pays to do your own research and decide what’s best for you and your budget. If you have a good down payment and solid credit you will probably be better off purchasing a Denton, Texas home rather than renting. The rent vs buy decision is not always as easy as some people make it seem. It often boils down to personal choice. To see what’s available in the local Denton Texas market call or email today.
The Rent vs Buy Tradeoffs
Renting a home does offer a few advantages. Flexibility and mobility are near the top of that list. There’s also the added bonus of having no maintenance since the landlord is generally responsible for repairs and upkeep of the property. If you are fortunate enough to save some money with your rent, you might be able to invest those savings in the market as an inflation hedge.
Buying a home can still be a great option. The purchase of a home can be a good store of value and an inflation hedge. One of the key benefits of home ownership for many families is that single-family homes often act as a fixed savings account. The magic of a fixed-rate mortgage over 30 years is an incredible gift for many homeowners. Patience and consistency with monthly payments generally results in equity appreciation over time. Of course there’s also the benefit and freedom of knowing that you own the home. You can work on it, remodel it or decorate to your own liking and taste.
If you are looking to buy or rent your next home in Denton Texas, give us a call!