Is renting better than buying in Tampa? New Zillow report shows over $1,000 gap

TAMPA, Fla. - Renting a home is currently costing significantly less each month than buying one, according to a new analysis from Zillow.

National rent trends

The backstory:

According to the Zillow Observed Rent Index, the typical U.S. rent was $1,948 a month in August.

Zillow found the typical monthly payment for a new home buyer, including mortgage, taxes and insurance, was $3,014. That creates a difference of $1,066 per month, or $12,792 a year.

Zillow said the gap has grown as mortgage costs have risen faster than rents.

The trend applies across the 50 largest metro areas in the country, including Tampa.

Tampa housing costs

Local perspective:

Tampa's rental market is also showing a growing supply of available homes and apartments.

Andrew Ricker, a realtor with Gulf Shores Realty, said the difference can be seen when comparing a typical three-bedroom, two-bathroom home.

"For an average 3-2, they're about $390,000 in Tampa. So I think that mortgage comes out to right around $3,000 a month, which is about $500 more expensive than you could rent a 3-2 just, you know, for argument's sake here," Ricker said. "So it is, I guess, in that nutshell, a little bit more affordable to rent in the Tampa area."

Zillow's analysis shows the Tampa-area difference is even larger when looking at its broader metro-area data.

By the numbers:

Zillow says renters who invest the difference between their monthly rent and the cost of buying could potentially turn those savings into additional wealth.

Based on Zillow's calculations, investing the $1,066 monthly difference could produce an additional $322 in the first year. Zillow says that could grow to a cumulative total of about $72,000 after five years if rents and home-buying costs remain stable.

That calculation assumes renters consistently save and invest the difference rather than spend it.

Zillow also points to the potential savings from avoiding some of the costs associated with homeownership, including closing costs and maintenance.

Ricker, however, points out homeownership remains one of the best investments a family can make.

"I think it's that same old adage if you're paying someone else's mortgage, right?" he said. "I can't speak for everyone, but I would say that any family, any individual that's looking to secure themselves for the next one, two, three, five, ten years, I don't have a crystal ball, but real estate is the number one wealth growth decision for your finances that you can make in your lifetime."

Real estate trends

Dig deeper:

Zillow's findings come as rental prices have been trending lower nationally.

Realtor.com previously reported that national rental prices had declined for more than 35 consecutive months.

At the same time, Tampa Bay continues to see an increase in the number of homes and apartments available to rent.

That combination of increased rental supply and higher borrowing costs has helped widen the monthly gap between renting and buying.

Industry market views

What they're saying:

Zillow says the rent-versus-buy calculation can be particularly significant for people who expect to move within five years or less.

The company says the cash-flow difference over a five-year period can reach tens or even hundreds of thousands of dollars in some markets.

The savings are especially large in some high-cost coastal markets. Zillow says renters in San Jose, for example, typically pay $94,596 less than buyers over a year and could earn an additional $2,381 by investing those savings.

The report also notes that the financial calculation involves more than the monthly payment.

Tampa