- Rising prices and high mortgage rates make owning a home more expensive than renting
- Austin, Texas has the biggest average disparity between the costs of renting and owning a home
- First time that it is cheaper to rent in all 50 metropolitan areas
While many people in the US dream of owning their own home, for many, it is staying just that – a dream. Indeed, it is now cheaper for people to rent homes than buy in all 50 of the US’ biggest metropolitan areas.
This situation has been created by rising home prices and elevated mortgage rates, according to research by Realtor.com’s February monthly rent report.
While it has been cheaper to rent in the vast majority of metro areas since last year, a spike in the real estate market has pushed it to 100% – the first time it has happened since Realtor.com started to track rent versus buying costs in 2021.
Realtor.com also reported that rent rates have continued to drop, for the seventh month in a row – although the average decline was slight, just $7 per month – leaving the median average rent in the US as $1,708. Meanwhile the cost of start homes was $1,027 more on average per month.
The biggest disparity between renting and owning is in Austin, Texas, where median monthly rent payments were $1,530 but monthly mortgage payments – including property taxes, insurance and HOA duties – were $3,695, more than double the cost of renting (141.5%).
Seattle in Washington State had the second highest rent to owning price disparity, at 121.1%, followed by Phoenix in Arizona (99%), San Fransisco in California (95.5%) and Los Angeles in California (89.7%).
It means that some people are putting off the decision to buy a home, although it was noted that there are still reasonably priced houses available in the suburbs and outskirts of metropolitan areas.
