It has become more affordable to rent a home than buying a residence in the top 50 U.S. metros, according to the latest Realtor.com Rental Report.
During February, the cost of buying a starter home in the top 50 metros was $1,027 (60.1%) higher than renting one – in comparison, the cost to buy was $865 higher than renting in February 2023. Declining rent prices measured against the one-two punch of higher buying costs and higher mortgage rates contributed to this scenario.
Among the top metros, the Texas capital of Austin led the nation in rent savings – the monthly cost of buying a starter home was $3,695, 141.5% more than the monthly rent of $1,530, a monthly savings of $2,165.
“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,” said Danielle Hale, chief economist at Realtor.com. “Deciding whether to rent or buy often goes beyond a financial advantage though, and likely depends on a consumer’s circumstances. Renters often prize flexibility while the biggest reasons homebuyers cite are that they want a place of their own and to be closer to family and friends. The financial scales have tipped monthly costs in favor of renting over buying, but it does not bring the benefit of housing wealth gains over time that owning does and movers should consider their long-term housing plans and personal situation as they make this decision.”
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There is not nearly enough support data here to make the stated case. Are they using comparable square footages, similar neighborhoods, appreciation of the owned home, rent increases of the rental, tax advantages of home ownership, etc. Every fair comparison I have seen over a 10 year period has been in favor of home ownership. A ratty apartment verses a home in the suburbs at some point in time is not a fair and proper comparison.