HomeOwn & InvestAre Apartments Cheaper Than Houses? Compared Living Costs

Are Apartments Cheaper Than Houses? Compared Living Costs

are apartments cheaper than houses

Apartments vs. houses. That is the age-old question, especially in the pandemic era when the housing market is exploding. 

If you are reading this, you may be at a crossroads, trying to decide if renting or buying is right for you.

Currently, about 44 million people rent in the United States. When it comes to homes, about 82 million of them in the country are owner-occupied. 

A lot of people view owning a home as the end goal when it comes to where they live.

But, is it the best route? Or are apartments cheaper than houses? 

That is what we are here to answer. 

Rent vs. Mortgage 

This is the easy one to look at. Mortgage payments usually last for 30 years and are paid monthly. So, you would have 360 payments to make on one. 

The average rent is $1,474 in the United States. The average house price is $374,900. 

So, let’s do some quick math here. For simplicity, we will say that the mortgage here has a 3% interest rate for 30 years. 

If you were to stick to the minimum payments on your mortgage, you would end up paying $1,581 per month. The total would be $569,014. In other words, you are paying ALMOST $200,000 in interest! 

This would not be the case for an apartment. The only thing that you would have to put up is a security deposit and maybe a couple of months of rent in advance. 

So, based on the averages, you could pay just over $100 more per month on a mortgage rather than an apartment. Of course, this can vary depending on your income, credit report, and how much money you put down on a house. 

But, it is not all doom and gloom to own a house with these numbers. Let’s say you want to sell your house after 10 years. 

You sell the house for $400,000. Doing this would cut 20 years of interest payments off, and you could potentially settle that mortgage and go buy another home with any leftover money. 

However, with rent, at the average rate, you would have spent $176,880 on rent costs and have no ownership of the property to show for it. This is the disadvantage of rent, you have no chance of getting that money back. 


For both renting and buying, it is highly suggested that you have insurance for the place that you live. Renters insurance is without a doubt cheaper, averaging about $188 per year. 

However, homeowners insurance is a lot more money, averaging $1,312 per year. This means that you have to spend $1,124 more per year on average insuring your home than you do a place that you rent. 

Adding this up over a 10-year span, you could spend about $11,250 more on insurance on a home than an apartment for every 10 years that you own vs. sell. 


Of course, no matter where you live, you need to pay utilities to make sure everything in your home works. Most things will be pretty similar regardless such as groceries, internet, cable bill, etc. 

But, there are a couple of things that differ such as an electric and/or gas bill. If you have a bigger home, it will take more electricity to keep all of the lights on in every room, plus heat or cool the place. 

For an apartment, you can get electric, gas, and heat/air conditioning for as low as $150 per month in the US. As for houses, expect that number to double to about $300. 

There are extra factors for houses such as water, and trash/recycling, which a landlord may cover in an apartment. 

Comparing the long-term costs of these, a renter can save around $1,800 a year on this bill by renting. Over the span of 10 years, that is $18,000. 

So, in the long run, this may be something to keep in mind. 

Property Taxes 

This is something that only a homeowner has the burden of. This can vary by state. 

Some states are safe havens for this, but others will make you pay as high as 2.42% of the value of your property per year. 

Let’s say you live in New Jersey, which has the highest property tax percentage in the country. On the value of an average house, you could be looking at $9,000 PER YEAR in property taxes. 

This adds up to $90,000 every 10 years. It is one of the biggest burdens of all for a homeowner, especially those that live in a higher percentage state. 


Of course, owning a home requires you to be responsible for all of the upkeep, renovation, and repairs that come along with it. As a renter, the landlord is responsible for all of the physical repairs of your building. 

Most say that the general rule is 1% of the house’s value per year on maintenance. On the national average value, that is about $3,749 per year. Over the course of 10 years, it adds up to $37,490. 

This is another cost that a renter does not have to worry about at all, and it is completely on the homeowner. 

Are Apartments Cheaper Than Houses? 

Now let’s take a look at the apartment living costs and house living costs. The main advantage that homeowners have here is that they can get any money back that they invest in a mortgage by selling their house, which a renter cannot do for their rent payments. 

So, every 10 years, a renter is probably out around $177,000 to pay their rent. This can increase if they go to multiple properties with deposits that do not get refunded. 

As for homeowners, at least in a high property tax state, they are out about $156,740 in those 10 years. Even if you reduce the property tax in half to get closer to the national average, you are out $111,740. 

In other words, despite the high additional costs that come with owning your own home, it still can be worth buying your home vs. renting in the long run.

The main factors will be keeping up with your mortgage payments, your house appreciating in value, and not having ridiculously high maintenance costs for your home. 

Read More Home Advice

Are apartments cheaper than houses? Well, you have a better idea now depending on your circumstances. 

Do you need more advice on how to improve your living area? Want to put the money you save to good use for your home?

Read more articles like this today! 

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