BELOW SUPERNAV drop zone ⇩

It’s now cheaper to rent than buy in all major US metros

  • In Feb., the monthly cost of buying was 60% higher than the cost of renting
  • Renting is now cheaper in all 50 of the largest U.S. metro areas
  • The gap was most significant in the greater Austin area of Texas

A white and red sign advertises a house for rent.

MAIN AREA TOP drop zone ⇩

MAIN AREA TOP drop zone ⇩

ovp test

mLife Diagnostics LLC: Oral Fluid Drug Testing

Male shot by female at Shreveport apartment

Class to create biodiverse backyard

Rules for outbursts at Caddo School Board Meeting

Mortgage Calculator

This calculator helps you estimate your monthly mortgage payment. It adds up the loan payment (principal + interest), property tax, and insurance. The loan payment is spread out over the years of your loan term.

This is the total amount you're borrowing from the bank.
This is the yearly interest rate on your loan.
This is how long you'll take to repay the loan.
This is the yearly tax you pay on your property.
This is the yearly cost to insure your home.

Monthly Payment Breakdown

Principal and Interest: $

Property Tax: $

Homeowners Insurance: $

Total Estimated Monthly Payment: $

(NewsNation) — Renting is now cheaper than buying a home in all of America’s largest metropolitan areas, according to a new Realtor.com report.

In February, the monthly cost of buying a starter home was $1,027 (60%) higher than the cost of renting in the top 50 U.S. metros, Realtor.com found.

A year earlier, renting was cheaper in 90% of metro areas, but over the past twelve months, lower rents and a tight housing market have pushed that to 100%.

“With rents continuing to fall and the cost of buying a home remaining high, exacerbated by the rise in mortgage rates in the later half of 2023, renting a home is now a more cost-effective option in all major U.S. markets,” Danielle Hale, chief economist at Realtor.com, said in a statement.

The gap between renting and buying was most significant in Austin-Round Rock, Texas, where the monthly cost of buying ($3,695) is 140% higher than the median rent ($1,530).

Across California, the cost advantages of renting are also pronounced. In the San Francisco Bay Area and Los Angeles, renters save more than $2,500 per month on average compared to buyers, according to the report.

The new findings come as potential homebuyers continue to face a trifecta of pain: elevated mortgage rates, low inventory and higher prices.

For renters, the outlook has improved slightly in recent months.

February marked the seventh consecutive month of year-over-year rent declines after the median asking rent in the 50 largest metros decreased to $1,708. That’s a $50 improvement (-2.8%) from the August 2022 peak but still considerably more than before the pandemic in Feb. 2020, when the median rent was $1,456 per month, according to Realtor.com.

The real estate listings company tracks how rent prices change each month by analyzing studio, 1-bedroom, or 2-bedroom units advertised on Realtor.com.

The website calculates the monthly cost of buying a starter home by averaging the median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market. The February analysis also assumed an 8% down payment with a 6.78% mortgage rate and included other fees.

The top 10 metros with the largest rent versus buy savings:

  1. Austin-Round Rock-Georgetown, Texas – $2,165 monthly rent savings (142% difference)
  2. Seattle-Tacoma-Bellevue, Wash. – $2,422 (121%)
  3. Phoenix-Mesa-Chandler, Ariz. – $1,528 (99%)
  4. San Francisco-Oakland-Berkeley, Calif. – $2,689 (96%)
  5. Los Angeles-Long Beach-Anaheim, Calif. – $2,539 (90%)
  6. San Jose-Sunnyvale-Santa Clara, Calif. – $2,780 (87%)
  7. Nashville-Davidson-Murfreesboro-Franklin, Tenn. – $1,366 (86%)
  8. Portland-Vancouver-Hillsboro, Ore. Wash. – $1,396 (84%)
  9. Sacramento-Roseville-Folsom, Calif.  –  $1,514 (82%)
  10. Houston-The Woodlands-Sugar Land, Texas – $1,103 (80%)
Your Money

Copyright 2024 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed

Site Settings Survey

 

MAIN AREA MIDDLE drop zone ⇩

Trending on NewsNation

MAIN AREA BOTTOM drop zone ⇩

tt

KC Chiefs parade shooting: 1 dead, 21 shot including 9 kids | Morning in America

Witness of Chiefs parade shooting describes suspect | Banfield

Kansas City Chiefs parade shooting: Mom of 2 dead, over 20 shot | Banfield

WWE star Ashley Massaro 'threatened' by board to keep quiet about alleged rape: Friend | Banfield

Friend of WWE star: Ashley Massaro 'spent hours' sobbing after alleged rape | Banfield

Clear

la

59°F Clear Feels like 59°
Wind
2 mph NW
Humidity
34%
Sunrise
Sunset

Tonight

Clear skies. Low 51F. Winds light and variable.
51°F Clear skies. Low 51F. Winds light and variable.
Wind
4 mph N
Precip
0%
Sunset
Moon Phase
Waxing Gibbous