Rent vs. Buy Budget Analysis Medford MA
Comparing the monthly housing costs of renting an apartment vs. buying a home in Medford, MA
Medford MA has long been considered a relatively low-key suburb of Boston. Located just 8 miles north of the city, Medford is home to lush green parks and an abundance of open space you just don’t see so close to Boston. Cost of housing in Medford has historically been much more affordable than in Boston proper. However recently, prices have been on the rise for both apartments and especially homes for sale in Medford MA.
Medford MA Median Sales Prices - Condo & Single-Family
The recent surge in real estate prices in Medford is definitely a byproduct of the Metro region’s growth over the past decade. Boston’s supply of residential for sale properties has struggled to keep pace with growing demand. As a result, real estate prices have soared everywhere in Greater Boston, especially for single family homes. The current 1 year median sales price for single family homes in Medford is $756,253, only $16K short of Boston’s median single family price ($772,925).
Condo pricing has remained relatively affordable in Boston thanks to a growing supply. Dozens of new construction projects have been completed in recent years adding tens of thousands of new condo units to Boston since 2015. So the Boston home buyer will find significantly more condos listed for sale in most areas close to the city, and much more reasonable prices. The median price for condos for sale in in Medford is $620,382.
Medford Average Apartment Prices
Average rent prices for Medford apartments have stayed well under that of Boston historically. However, recent apartment supply data in Medford suggests that a shift in renter demand may have benefited Medford as they are seeing some of the lowest apartment availability on record coming out of the pandemic. Still, at $2,119, the average rent price in Medford is almost 20% less than Boston’s average rent ($2,532).
Medford MA Rent vs. Buy By The Numbers
In order to determine whether renting or buying would be more economical, we start with a basic formula:
Monthly Cost of Renting an Apartment - Monthly Cost of Owning a Home = +/- Monthly $ Difference of Renting vs. Buying
The monthly cost of renting an apartment is derived from the average rent price. The monthly cost of owning a home is calculated by taking the median sales price and calculating the monthly mortgage payment for standard loan terms (30% down, .3% APR, 30 year term). Then you add the monthly tax payment and monthly homeowners insurance premium based on current Medford tax rates and average HOI. A $300 HOA fee is added to the condo rent vs. buy calculation to account for the average condo HOA.
Medford Condos: $620,382 Median Sales Price
$2,725 Estimated Monthly Mortgage + Tax + HOI + Maint.
-$2,119 Average Rent Price in Medford
= $606/month more to own a condo vs. rent an apartment in Medford
Medford Single Family Homes: $756,253 Median Sales Price
$2,930 Estimated Monthly Mortgage + Tax + HOI + Maint.
-$2,119 Average Rent Price in Medford
=$811/month more to own a home in Medford vs. rent an apartment
In Medford, current market data suggests that it would be more economical to rent an apartment than it would be to purchase a condo (-$606/month) or a single-family home (-$811). However, if you take unit size into account, we find that on average it’s cheaper to own a home in Medford for larger size units (4 bedroom+) than to rent the same size apartment.
It’s important to mention that these rent vs. buy calculations are a comparison of averages, and every property for sale or for rent is unique in its pricing and costs. But by using this basic formula, you can compare to cost of any apartment or house against the area average or against each other. This gives you powerful information that will simplify the decision making process.