To own, or not to own The cost of owning a home in Maine is higher than renting, a Federal Reserve Bank study finds

Low-income and middle-income households in Maine and across New England are finding it more expensive to own a home than to rent, according to a new study from the Federal Reserve Bank of Boston.

Just ask Stephen Bickford, a 53-year-old Bangor resident who teaches a first-time homebuyer course for the Penquis Community Action Program and Washington Hancock Community Agency. Despite years of researching and professing the ins and outs of homeownership, Bickford is a renter.

“The biggest thing I don’t want to give up is my mobility,” Bickford said. “My wife and I view the United States as our backyard. We can move anywhere we want … with 30 days’ notice.”

And indeed they have. Bickford and his wife, Debra, have lived in Maine, California, Wyoming and Washington state and say they are not ready to settle down. Nor are they interested in the responsibilities that come with owning a home. Instead of mowing the lawn on summer weekends, the Bickfords head for the beach. Without children to put through college or other major expenses, Bickford says, they have no need for the equity that lies in property ownership.

The Bickfords pay $575 a month, utilities included, for their one-bedroom apartment. When asked, Bickford said he thinks renting is less costly than homeownership. And he’s right, according to a report published this month by the New England Public Policy Center at the Federal Reserve Bank of Boston.

The 173-page report, titled “The Lack of Affordable Housing in New England,” stated that the median rent in Maine was $500 a month in 2005, not including utilities. The combined median monthly mortgage, tax and insurance payments for a homeowner in 2005, not including utilities, was $810.

However, that same year, the number of Maine homeowners burdened by housing costs was only 1 percent higher than the number of renters burdened by housing costs.

A household is considered “cost-burdened” if it spends more than 30 percent of its income on housing costs.

“The reason is probably that people choose to become homeowners when they can afford to be,” said Alicia Sasser, economist at the New England Public Policy Center.

But not everyone is content to rent until they have the income to comfortably own a home. Lindsay Collins, a 24-year-old human resources worker at St. Joseph Hospital in Bangor, was tired of paying rent and had a hard time finding a landlord who welcomed her two dogs. So Collins purchased her first home, a two-bedroom, two-bath ranch in Kenduskeag.

“When you first look superficially at the numbers, it seemed a lot less expensive than renting,” said Collins, who is single.

But the cost of homeownership was a shock. Collins went from spending less than a third of her income on rent to spending about half her income on monthly mortgage, taxes, insurance and utility costs.

“It’s a lot more expensive, but doing it again, I would definitely stay with my house,” Collins said. “You’re paying money for something that’s yours and you’re not constantly worrying about the person upstairs. You can vacuum your floor at 9 at night.”

Collins is one of many low-income and middle-income Mainers who spend a large portion of their income on housing costs. According to the report, in 2005, 16 percent of middle-income renters were cost-burdened and 17 percent of middle-income homeowners were cost-burdened.

In very low-income households in 2005, 70 percent of renters were cost-burdened and 71 percent of homeowners were cost-burdened.

The report points out that in some New England states, the difference between the cost of renting and owning a home is extreme. In Connecticut, for example, in 2005, only 7 percent of middle-income renters were cost-burdened, while 20 percent of middle-income homeowners were cost-burdened.

Nationwide, 18 percent of middle-income renters were cost-burdened in 2005 and 21 percent of middle-income homeowners were cost-burdened. Those figures soared above 80 percent for low-income households.

The report also shows that Mainers are more likely to be homeowners than other New Englanders. In 2005, 74.9 percent of Maine households owned their home. Nearly half, 48.2 percent, of the state’s lowest income population own their own homes.

Maine is second only to New Hampshire in terms of the percentage of the population that owns homes. In New Hampshire, 76.2 percent of residents owned their own home in 2005.

The report states that the supply of affordable housing in New England is inadequate, and cautions that the shortage may be in determining the region’s ability to attract and keep workers. It suggests providing subsidies for renters and homeowners, increasing public funding, removing barriers to affordable housing development and preserving existing affordable units.

“More and more households, spanning a wide swath of the income distribution, find that they can get more ‘bang for their buck’ outside New England, particularly the region’s major metropolitan areas,” the report stated.