Buying vs. Renting in 2025: What Makes the Most Sense in Montgomery, Alabama?

The decision to buy or rent in Montgomery, Alabama, isn’t just about today’s costs—it’s about your future plans, financial stability, and lifestyle goals.

According to ATTOM’s 2025 Rental Affordability Report, in most U.S. markets, homeownership takes up a smaller portion of wages than renting a comparable property. But does that mean buying is always the right choice? Not necessarily.

Let’s break down the latest data, when buying makes sense, when renting is the better option, and what you should consider before making your move in the Montgomery real estate market.

What the Data Says

Each year, ATTOM analyzes home prices, rental costs, and wages across the U.S. to determine which option—buying or renting—is more affordable. Their 2025 report highlights three key findings:

• Buying a home is cheaper than renting a three-bedroom in nearly 60% of markets. Monthly homeownership costs, including mortgage, insurance, and property taxes, take up a smaller percentage of income than renting a comparable home.
• Both renting and buying remain expensive. Housing—whether you’re paying rent or a mortgage—consumes 25-60% of the average worker’s wages, making affordability a major challenge.
• Down payments are a hurdle to homeownership. While monthly costs may favor buyers, the upfront investment of a down payment and closing costs must be considered.

For those looking at Montgomery homes for sale, these factors play a key role in deciding whether buying or renting is the smarter financial move.

When Buying a Home in Montgomery, Alabama, Is the Right Move

While home prices continue to rise, ATTOM’s data shows that monthly homeownership costs are still lower than renting a three-bedroom home in nearly 60% of the country. Here’s when buying makes sense.

You Plan to Stay in Montgomery for a Few Years

Real estate is a long-term investment. If you sell too soon, you could lose money on transaction costs, even if your home’s value has gone up. A five-year commitment allows you to build equity and offset costs like closing fees and moving expenses.

You Can Afford the Upfront Costs

One of the biggest hurdles to homeownership is the down payment and other upfront expenses. If you can comfortably cover a down payment, closing costs, and emergency savings without straining your budget, buying makes financial sense.

You Want to Build Wealth Over Time

Renting provides a place to live, but homeownership builds long-term wealth. Every mortgage payment increases your equity, which can serve as a financial asset in the future. Montgomery homes for sale offer an opportunity for buyers to secure real estate in a growing market.

You Need More Space

If you’re currently renting a one or two-bedroom apartment but need more room, buying might be the best option. ATTOM’s report shows that renting a three-bedroom home often costs more than owning a comparable property, making homeownership the more affordable choice for those needing extra space.

However, if you’re comfortable in a one or two-bedroom rental, renting may still be the cheaper option. Smaller rentals typically cost less than the monthly expenses of homeownership when you factor in maintenance, insurance, and property taxes.

When Renting in Montgomery, Alabama, Is the Smarter Choice

Even though homeownership is often more affordable in the long run, renting has advantages—especially if flexibility and financial security are your top priorities.

You Need Flexibility

If your job situation, relationship status, or long-term plans are uncertain, renting allows you to move without the stress of selling a home.

You Don't Have a Large Emergency Fund

Owning a home comes with maintenance costs, repairs, and property taxes. If you don’t have three to six months’ worth of expenses saved, renting might be the better option until you build up financial reserves.

You Live in an Expensive Housing Market

In some areas, home prices require a huge down payment and take up a large percentage of income. If mortgage payments, property taxes, and insurance would stretch your budget too thin, renting may be the safer financial decision.

You Don’t Want the Responsibility of Maintenance

Owning a home means handling repairs and upkeep, which can add up quickly. If you’d rather call a landlord when something breaks instead of managing it yourself, renting is the hassle-free choice.

Key Takeaways: Should You Buy or Rent in Montgomery, Alabama?

The best choice depends on your financial situation, lifestyle, and long-term goals.

• Buy if you want stability, are financially prepared, and plan to stay in Montgomery for several years.
• Rent if you need flexibility, aren’t ready for homeownership costs, or prefer not to deal with maintenance responsibilities.

Still unsure which option is best for you? Let’s chat about your goals and what makes the most sense for your situation. Click here to schedule a call about Montgomery real estate opportunities.