Realtor.com analysis shows renters saving hundreds monthly nationwide despite narrowing affordability gap.
By yourNEWS Media Newsroom
Renting a home is currently more affordable than purchasing one in all 50 of the largest metropolitan areas in the United States, according to a new April 16 analysis from Realtor.com.
The report found that individuals leasing typical rental units are spending less each month than those financing entry-level homes, reflecting continued pressure from elevated home prices and borrowing costs.
“A person moving into the typical rental spends less each month than someone buying a starter home today,” Realtor.com chief economist Danielle Hale said. She added that renters who consistently save the difference “have a real opportunity to build toward a down payment faster than they might think.”
On average, renters are saving approximately $920 per month compared with the cost of homeownership, according to the report. Analysts noted that these savings could be redirected toward future home purchases, particularly in markets with the widest cost disparities.
National rental prices have shown modest easing. The median rent in March was $1,699, marking a 1.5 percent decline from a year earlier and continuing a 32-month streak of annual decreases for smaller apartment units. Despite that trend, rents remain 17.5 percent above pre-pandemic levels, though they have fallen 5.4 percent from their peak in August 2022.
Certain metropolitan areas show particularly large gaps between renting and buying. In the Austin, Texas region, renters can save roughly $1,719 per month, with median rents at $1,361 compared to mortgage payments averaging $3,080. In Seattle, Washington, the difference exceeds $2,000 monthly, with rents around $1,862 and mortgage costs near $3,882.
Other major cities with substantial rental savings include Phoenix, San Francisco, Los Angeles, Dallas, and Columbus, where the cost of ownership remains significantly higher than leasing.
The report notes that the rent-versus-buy decision varies based on individual financial conditions, including upfront costs, long-term equity, and available savings. It also found that individuals who purchase their first home by age 30 tend to have a net worth 22.5 percent higher by midlife compared to those who delay homeownership until their 40s.
While renting remains more affordable overall, the gap between renting and buying has narrowed slightly over the past year, decreasing by an average of $136. Analysts attributed the shift to modest declines in mortgage rates and home prices in select markets.
In several cities, the cost difference between renting and buying is minimal. In Pittsburgh, Pennsylvania, renters pay about $1,459 per month, compared to $1,523 for homeowners. Memphis, Tennessee, shows a similar pattern, with rents at $1,106 and mortgage payments at $1,296. Baltimore, Maryland, and Orlando, Florida, also reflect narrower margins.
Realtor.com economist Jiayi Xu said these shifts are being driven by different factors depending on the market. “In Pittsburgh, it’s rising rents that are closing the gap. In markets like Memphis and Baltimore, buying costs are cooling faster than rents,” she said.
In higher-cost coastal regions, affordability remains a significant barrier to homeownership. In San Jose, California, buying a starter home costs 74 percent more than renting, with average monthly mortgage payments reaching $5,701 compared to rents of $3,276.
The report indicates that rental prices may rise modestly in the coming months due to seasonal trends, but broader supply increases from recent multifamily construction are expected to continue placing downward pressure on rents year over year.
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