Study: It’s Cheaper To Buy A Home In Indy Than It Is To Rent
Source: Lance McMillan / Getty
INDIANAPOLIS — Is it cheaper to buy a home or rent a home in Indianapolis? In the last few years, the latter may have been the case, but a new study shows that people looking for a place to live in Indianapolis may be financially better off buying nowadays.
Clever, which is a real estate company that keeps track of the affordability of homes in certain major metro areas, uses an algorithm to gauge whether it’s better to buy or rent in these cities. Anything over a ratio of 21 in this algorithm means it’s better to rent.
Indianapolis recently came in at a 15 based on current home prices and the average cost of rent for a three-bed, one-bathroom house.
“We’ve been affordable for a long time,” said Indy realtor Joel Clausen on WISH-TV. “That’s what’s really attractive about Indianapolis being a big metropolitan area, which is that it’s still pretty affordable to live here based on other metro areas about our size.”
Even though home and rent prices have both gone up in the last few years, the cost to buy a home has not increased in Indianapolis at the pace of other metro areas like Chicago.
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“Indianapolis for a long time you had certain pockets all over where you could really get a $700 a month rent a few years ago and get a nice 3-bedroom, 1.5- (or) 2-bathroom house,” Clausen said. “And now, in some of those same places, when I’m looking for investors and such, those rents are around $1,200, $1,300. That’s just within five years it almost doubled.”
Clausen believes this shift will keep Indianapolis an affordable place to buy a house instead. Indianapolis is the 15th largest metro area by population in the United States.
The study listed Indianapolis’s average home price at $263,696. Rent was at nearly $1,577 a month.
