Should You Rent or Buy After Moving to a New State?
After a long-distance move, renting for the first year is often the safer choice, even if you plan to buy. Here's how to decide, and the rules lenders and landlords use.
Why renting first makes sense
- You don't know the neighborhoods yet. Commute times, schools, noise and flood risk are hard to judge from a distance.
- Buying is expensive to undo. Closing costs and agent fees mean selling within a year or two usually loses money.
- Your job may change. Relocations sometimes don't work out; renting keeps you flexible.
- Lenders like stability. A few months at the new job can make mortgage approval smoother.
The affordability rules
Renting: the common guideline is to spend no more than 30% of gross income on rent. At the U.S. median rent of $1,487 a month (Census ACS 2024), that means earning about $59,480 a year.
Buying: lenders often use the 28/36 rule: housing costs (mortgage principal and interest, property tax and insurance) should stay under 28% of gross income, and all debt payments under 36%. With the U.S. median home value at $360,600, that usually requires an income well above the national median household income of $81,604.
See the numbers for each state on our income needed to buy a house and salary needed pages.
When buying right away can work
- You know the area well (you've lived there before or have family there).
- You expect to stay at least five years.
- Rents are high compared with home prices, so owning costs about the same per month.
- You have savings for a down payment, closing costs and an emergency fund after the move.
Costs buyers forget
- Property tax varies widely by state and county.
- Homeowners insurance has risen sharply in states exposed to hurricanes, hail and wildfire.
- HOA fees, maintenance (budget 1% of the home's value a year), and utilities for a bigger space.
A simple test
Divide the price of a typical home by a year of rent for a similar place. If the result is below about 15, buying tends to be cheaper over time; above about 20, renting usually wins. Between the two, your time horizon decides.