With rents skyrocketing across the United States — and even more so in New York City — this once hardcore renter is faced with a question of whether it ultimately makes more sense to buy.

Of course, there has always been a premium to living in New York and other major cities, but rental costs have become not only outrageous, but extremely unpredictable.

Rents in New York City have risen 19% over the past 12 months, compared to a national average of 12.3%, according to a New York City economic report created by Comptroller Brad Lander. The average rent in Manhattan in February 2021 (when I moved into my current apartment) was $2,804. In August, the average rent in Manhattan was $3,998, according to data from the Zillow Rental Index. It is not uncommon to hear landlords asking for an additional $700 to $1,200 per month when renewing a lease.

New York isn’t the only city where tenants are suffering. Median monthly rent in Los Angeles rose $505 from a year ago, while in San Francisco it rose $408, according to rental market trends data from Zillow. Seattle saw increases of $218 and Atlanta rents rose $193 per month. Even a smaller town like Lincoln, Nebraska saw its median monthly rent increase by $138.

Yet even with crazy rental prices, the only way to buy more than a studio in Manhattan will be cheaper on a monthly basis is if you can afford to pay everything in cash – the reason, of course, being the exorbitant prices of property taxes and co-op or condo fees. There’s more shade in the outer boroughs, but those, too, are no longer filled with affordable homes to buy in sought-after locations.

Co-ops dominate the housing market in Manhattan. Those who buy into a co-op do not own their specific unit, but rather are shareholders in a building. As such, shareholders share the costs for everything from upkeep, general upkeep, super or doorman salaries, and property taxes. Each co-op is a unique little microcosm, but co-op fees can range from a few thousand per month to over $10,000 per month. Again, this does not include a mortgage.

You must also be approved by a co-op board and often have to go through a highly invasive application process that includes providing all of your financial information to strangers for review. To top it off, many co-ops have restrictions on using apartments as rental properties, meaning there’s no point in using them as investment property in the future.

Keep in mind that in addition to typical closing costs and other fees that are part of the buying process elsewhere, New York State residents are subject to mansion tax, which relates to the cost and not the size. Real estate that costs more than $1 million is hit with a 1% tax, and New York residents may be hit by an additional, gradually increasing tax for properties that cost more than $2 million.

Let’s say a two-bedroom, two-bathroom apartment in Manhattan costs $1.425 million. The monthly maintenance fee (i.e. co-op fee) is $2,200 and you must deposit at least 35% by the co-op board. With current mortgage rates, you’re probably looking at a monthly payment of nearly $5,900 plus monthly maintenance costs of $2,200 – which includes your taxes, but not possibly homeowner’s insurance or utilities. That means you’re paying at least $8,100 a month for your apartment.

A two-bedroom, two-bathroom rental in the same neighborhood would typically cost between $4,200 and $5,000. However, if you are able to pay everything in cash, meaning you have $1.425 million in reserve plus closing costs, your monthly payment is cheaper than renting.

Ownership and net worth are the main attractions of home ownership. You are not “wasting your money” because you are increasing the equity in your home. This equity can be used in the future to sell and buy a larger home, if needed, or help fund other financial goals, especially if you move to an area with a lower cost of living. The thing is, it assumes decent price appreciation, and it won’t take months or even years to sell when you’re ready to move. The required co-op approval can make it difficult for New York homeowners who don’t have complete autonomy in choosing a buyer.

Much of this analysis comes down to the size of a home you want or need and the location. Entering a neighborhood poised to be the next hot zone is where yields can really soar.

However, a major consideration for homeownership in a chaotic rental market goes beyond the simple reality of cost.

The mental and emotional work of frequent moves is exhausting. Not knowing how much your rent might increase can trigger anxiety months before a lease renewal. The cost of moving is high considering the supplies to pack, professional movers, hours of research and time spent viewing apartments, and to top it all off, paying a broker’s fee that can cost a month 15% of the annual rent. If the average rent in Manhattan hovers around $4,000, the move could easily cost upwards of $6,000 before factoring in the security deposit.

Some lifestyle choices will also limit housing options. As of this writing, if I enter a maximum of $4,000 online for a one-bedroom apartment search in my neighborhood, 256 apartments come up. If I filter for pets allowed (we have a dog) it drops to 176 apartments. If we decided to expand beyond the two of us and our dog, we would probably want a two bedroom. If I filter for two bedroom apartments, the results drop to 23. Then you have to compete with all the other people looking for a pet friendly two bedroom apartment in our neighborhood.

Remember, however, that buying a home is no picnic and home ownership comes with frustrations and costs. It also requires considering potential lifestyle changes, like expanding a family and outgrowing a house and having to sell and buy again, or buy more than you technically need from the start to grow into the business. space (the latter being potentially expensive -prohibitive at the time you want to buy).

Frankly, the calculation between buying and renting real estate in New York and across the country is incredibly stressful these days. It’s like there’s no right answer because either is incredibly expensive and there are pros and cons to each option.

Renting means more flexibility and no headaches if a pipe or fixture bursts unexpectedly, but no guarantee of when it will be fixed, with less stability. Owning means building equity for the future and having stability, but dealing with a hot, potentially overvalued market and high mortgage rates. Much of this answer comes down to your means and desire for stability – and how badly you want to stay in the city.

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Erin Lowry is a Bloomberg Opinion columnist covering personal finance. She is the author of the three-part “Broke Millennial” series.

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