Deciding whether to rent or buy a home in Massachusetts has become one of the biggest financial questions of 2025. With home prices at historic highs, mortgage rates still above pandemic levels, and rents climbing year after year, many residents are wondering which path makes the most sense today — especially in Greater Boston and high-demand suburbs like Andover, North Andover, Reading, and Lexington.

The answer? It depends on your finances, time horizon, and local market conditions. Below, we break down the pros and cons of renting vs. buying and include real-world numbers to help you compare the cost difference in Massachusetts.

What the Massachusetts Market Looks Like Today (2025 Snapshot)

To understand the rent vs. buy decision, it’s helpful to look at what’s happening across the state:

Home Prices

• Median single-family home price in MA (2025): ~$640,000

• Median condo price: ~$520,000

• Popular suburbs north of Boston (e.g., Andover, North Andover): $780,000–$900,000

Mortgage Rates

• Average 30-year fixed mortgage rate: 6.2%–6.7%

Rents

• Average 2-bedroom apartment in MA: $2,600–$3,200/month

• Suburban towns like Andover/North Andover: $2,700–$3,400/month

• Greater Boston luxury rentals: $3,800–$4,800+/month

Cost Comparison: Renting vs. Buying in Massachusetts

Let’s break it down with a realistic example.

Scenario: Buying a $700,000 Home in Massachusetts

Assumptions:

• 10% down payment: $70,000

• Mortgage amount: $630,000

• Interest rate: 6.5%

• Property taxes (MA average): 1.1% = $7,700/year

• Homeowners insurance: $1,500/year

• PMI (since less than 20% down): $250/month

• Maintenance estimate: 1% of home value/year = $7,000

Monthly Cost of Buying

Item Monthly Estimate

Principal & Interest $3,984

Property Taxes $641

Insurance $125

PMI $250

Maintenance Reserve $583

Total Monthly Cost ≈ $5,583/month

* Estimated monthly cost to buy in MA: $5,500–$6,000

Scenario: Renting in Massachusetts (Comparable Home)

A comparable single-family rental in Andover or similar towns generally costs:

• $3,800–$4,500/month

Let’s choose $4,200 for comparison.

* Estimated monthly cost to rent: $4,200

Rent vs. Buy: Which Is Cheaper Right Now?

Option Monthly Cost Annual Cost

Renting $4,200 $50,400

Buying $5,583 $66,996

Renting looks about $1,300/month cheaper.

But here's where things shift…

Hidden Advantages of Buying (The Equity Factor)

Even though buying may cost more each month, part of your payment goes toward building equity.

In the first year of a $630,000 mortgage at 6.5%, roughly:

• Monthly principal paid: ≈ $925

• Annual principal paid: ≈ $11,100

You are effectively:

• Spending more per month, but

• Putting $11,000+ back into your net worth in Year 1

• And even more each year as interest decreases

Meanwhile, 100% of the rent is gone forever.

Appreciation: A Key Massachusetts Advantage

Home values in Massachusetts have risen about 4.5% annually over the last 10 years.

If a $700,000 home appreciates at 4%:

• Year 1 appreciation = $28,000

• Year 5 appreciation = $152,000

• Year 10 appreciation = $331,000

Combined with principal paydown, equity builds quickly.

How Long Do You Need to Stay to "Win" a Purchase?

A typical break-even point in MA is 3–5 years, but in high-demand towns like Andover or Winchester, break-even can be as low as 2–3 years because:

• Prices rise faster

• Supply is limited

• High-income buyers keep demand strong

When Renting Makes More Sense in MA

You don’t have enough saved for a down payment

Even 5% on a $700,000 home is still $35,000 plus closing costs.

You may relocate within 1–3 years

Selling too soon may result in losses.

You want predictable monthly expenses

Renters don’t deal with:

• Repairs

• Major maintenance

• Tax increases

You prefer flexibility

Especially important for remote workers, students, or temporary relocations.

When Buying Makes More Sense in MA

- You plan to stay 5+ years

This is the sweet spot for MA appreciation.

- You want to build long-term wealth

Equity in MA homes has historically outperformed stock market returns.

- You’re tired of rent increasing yearly

Most renters face $100–$300 rent increases each year.

- You qualify for first-time buyer programs

MassHousing and FHA loans offer:

• Low down payments

• Reduced PMI

• Cheaper interest rates

Example: Andover Buyer vs. Renter Over 5 Years

Renter

• Rent: $4,200 → likely $4,600+ by Year 5

• Total paid over 5 years: ≈ $265,000

• Net worth gained: $0

Buyer

• Monthly: ~$5,583

• 5-year payments: ≈ $335,000

• But you gain:

  • Principal paid: ≈ $65,00

  • Appreciation (4%/yr): ≈ $152,000

• Net equity: ≈ $217,000

= Buyer’s net advantage after 5 years: ~$217,000

Even though the buyer spent more monthly, they gained six figures in wealth — common in towns like Andover and Lexington.

So… Rent or Buy in Massachusetts?

Rent if you want flexibility and lower short-term expenses.

Buy if you want long-term financial growth and can stay put for at least 3–5 years.

In many MA towns — especially high-demand suburbs — owning still builds far more wealth over time, even with today’s higher interest rates.

Matt Witte strives to be the best realtor in North Andover, MA.

Any questions about real estate, reach out to Matt Witte, North Andover Realtor, MA