Buying Beats Renting in 22 Major U.S. Cities

Buying Beats Renting in 22 Major U.S. Cities

According to a recent Zillow study, in 22 of the 50 largest metro areas, monthly mortgage payments have now dropped below what you'd pay for rent. This shift highlights the increasing affordability of owning a home compared to renting in many regions (check out the chart below for more details):

As mortgage rates have eased from their recent peak, home prices have leveled out, and inventory has increased, housing affordability is improving significantly. In many areas, it’s now less expensive to buy a home than to rent. 

If you’ve been renting for a while, this shift is a big deal. And even if your city isn’t on the list where this is happening, don’t worry – changes are happening fast, and your area could be next. Talking with a local real estate agent before these trends reach your ideal neighborhood could make all the difference.

A local expert can help you understand that what may have seemed out of reach is becoming more affordable than you might think. While the Zillow study compares rent to the principal and interest portion of a mortgage payment (not the total monthly cost), it's important to factor in additional costs like taxes, insurance, utilities, and maintenance when buying a home. But remember, renters face extra expenses too, such as renters’ insurance, utilities, and parking fees.

Doing the math may seem daunting, but it’s worth considering today’s improved affordability. Grab your calculator and consult your agent to see if you're in a position to buy what you couldn't afford just a few months ago.

As Orphe Divounguy, Senior Economist at Zillow, says:

“… for those who can make it work, homeownership may come with lower monthly costs and the ability to build long-term wealth in the form of home equity — something you lose out on as a renter. With mortgage rates dropping, it's a great time to see how your affordability has changed and if it makes more sense to buy than rent.”

Whether you're in one of the metro areas where monthly mortgage payments are now lower than rent or anywhere in between, it's a great time to connect with a local real estate agent and start the conversation. With mortgage rates dropping and more homes coming onto the market, you'll want to be prepared to dive back into your home search before the competition heats up.

Bottom Line

If you're feeling ready to move on from renting and want to explore what it takes to buy a home in today's shifting market, let's sit down and crunch the numbers together. We'll see if buying a home makes sense for you now or in the near future.