Buying More Affordable Than Renting in Growing Number of US Cities
The monthly cost to purchase a median-priced home increased just .2% year-over-year, while the cost to rent was up 2.4%.
Buying is officially cheaper than renting in 15 of the 50 largest US metros— and that number is growing, despite double-digit home price increases in some cities.
A recent analysis from Realtor.com shows that Cleveland, Chicago, Pittsburgh, Riverside, Calif. and Miami are the top markets where it’s cheaper to buy than to rent—and an additional nine markets are within 5% of flipping in favor of buying over renting. Those cities include Atlanta, Orlando, Birmingham, Phoenix, Buffalo, Memphis, Washington, D.C., Las Vegas and Milwaukee.
Of the top 10 markets where it’s cheaper to buy, homebuyers save an average of 11% of their monthly costs compared to renters, according to Realtor.com.
Perhaps unsurprisingly, San Jose, Austin, Sacramento, Seattle and San Francisco top the list of cities where it’s cheaper to rent. As WFH becomes more of a permanent strategy for many companies, large tech hubs like San Jose, Sacramento, Seattle and LA have seen rents decrease, with renters in those cities saving an average of 30% in monthly costs over homebuyers.
Realtor.com’s analysis compared the monthly cost of purchasing a median-priced home to the median price of renting a two- to four-bedroom unit in the top 50 US markets in January 2021. Overall, the monthly cost to purchase a median-priced home was $1,988, while the median monthly rent clocked in at $1,727. With interest rates at historical lows, the monthly cost to purchase a median-priced home in a market increased just .2% year-over-year, despite price growth, while the cost to rent was up 2.4%.