These Markets Have the Biggest Gap Between Renting and Owning

A report from Realtor.com found that Richmond is where there is the greatest year-over-year dollar savings in renting vs. owning a home.

There, the cost to buy a starter home was $1,107 (74.2%) higher than the cost to rent one. That is up from the $411 (27.5%) premium the year earlier, meaning occupiers would save an additional $696 than buying when compared to the same time last year.

Los Angeles, Nashville, Phoenix, Memphis, and Raleigh were other top markets seeing higher savings from renting than buying in Feb 2024 when compared to a year ago.

Memphis, together with Pittsburgh, St. Louis, Baltimore, and Birmingham, are five metros that flipped from buy-favoring to rent-favoring over the past 12 months. There, the buy-rent gap for each is smaller than its peers.

Specifically, Pittsburgh was the metro seeing the smallest buy-rent gap across the top 50 metros in February 2024.

In fact, Memphis, St. Louis, Baltimore, and Birmingham were all among the top markets seeing a high share of homebuying from investors.

“This trend may be accelerating the growth of home prices, increasing the overall cost of home buying and tilting these markets further toward rent-favoring,” according to the report. It was found that in San Jose, Dallas, San Francisco, Columbus, and Miami, the advantages of renting have been pronounced in most of the metros, but the disparities between buying and renting have lessened in dollar terms.

Specifically, buying a starter home in San Jose cost an additional $2,780 (86.7%) than renting one in February 2024 but it was $115 less than the buy-cost gap seen in February 2023.

In Dallas, the gap between buying and renting was $1,183 (79.3%), $45 smaller than the gap observed a year ago.

Additionally, the buy-rent disparity in San Francisco decreased by $29 over the past year, and in Columbus, the gap narrowed from $926 (76.9%) in February 2023 to $902 (76.4%).

The buy-rent gap in Miami also decreased by $16 over the past 12 months and the gap in Minneapolis. declined by $1.

Multifamily Spring:

Multifamily Spring is coming to New York City this April 18. This year’s program will bring together the industry’s most influential and knowledgeable real estate executives from the multifamily sector for 5 hours of face-to-face networking and over 5.5 hours of can’t miss sessions. Learn more or register here.