- Renting is now cheaper than buying in all of the 50 largest U.S. metros, a shift driven by high mortgage rates, elevated home prices, and declining rents.
- In July, the cost of buying a starter home was $1,067 higher per month than renting, with cities like Austin, Seattle, and LA leading in rental savings.
- The rent-buy cost gap is narrowing, with some cities seeing a reduced renting advantage as more affordable homes hit the market.
According to the latest Realtor.com Rental Report, renting a home now makes more sense financially than buying in all 50 largest U.S. metro areas, as reported in Globest.
Renting vs. Buying
Since July, renting has become cheaper than buying in every major U.S. metro, a shift from the previous year when 47 metros favored renting.
Last month, the cost of purchasing a starter home was, on average, $1,067 higher per month than renting, translating to a 61.3% premium. Cities like Memphis, Birmingham, and Pittsburgh, which previously favored buying, have now become rent-favoring markets.
Austin leads the list of cities where renting is the most financially advantageous. The monthly cost of buying a starter home in Austin was $3,558 in July, a staggering 144.4% more than renting, resulting in $2,120 in monthly savings for renters.
Other cities where renting offers significant savings include Seattle, LA, San Francisco, and NYC.
Renting Advantage Shrinks
Despite the financial benefits, the renting advantage is beginning to diminish in some areas. The rent-buy cost gap narrowed by 2% compared to last year due to more affordable home listings. Last year, buying in the top 50 metros was 63.3% more expensive than renting, compared to 61.3% this year, signaling a slight easing in home prices.
This trend is most noticeable in cities like San Francisco, San Jose, Denver, Washington, D.C., and Miami, where home prices have fallen drastically. However, not all metros are experiencing this change—markets like Memphis and Birmingham are now rent-favoring due to more investor activity.
July marked the twelfth consecutive month of YoY rent declines for 0–2 bedroom properties. This trend is particularly beneficial for first-time homebuyers who are struggling with high mortgage rates and home prices.
Top 10 Renter Metros
The report lists the top 10 metros where renting offers the largest savings compared to buying:
- Austin-Round Rock-Georgetown, TX: Buying costs 144.4% more than renting, with a $2,120 monthly savings.
- Seattle-Tacoma-Bellevue, WA: 107.7% more, $2,222 savings.
- Los Angeles-Long Beach-Anaheim, CA: 99.5% more, $2,784 savings.
- Nashville-Davidson-Murfreesboro-Franklin, TN: 93.3% more, $1,399 savings.
- Phoenix-Mesa-Chandler, AZ: 91.6% more, $1,396 savings.
- Columbus, OH: 91.3% more, $1,090 savings.
- Dallas-Fort Worth-Arlington, TX: 88.3% more, $1,307 savings.
- San Francisco-Oakland-Berkeley, CA: 88.2% more, $2,442 savings.
- New York-Newark-Jersey City, NY-NJ-PA: 81.1% more, $2,342 savings.
- Boston-Cambridge-Newton, MA: 78.6% more, $2,336 savings.
Why It Matters
Ralph McLaughlin, senior economist at Realtor.com, highlighted the evolving rental landscape. “We are starting to see the advantage of renting over buying decrease across several metros, especially as more affordable inventory hits the market,” he noted.
While renting is still more economical, first-time buyers may soon find more opportunities in the housing market, although financial challenges remain.
