10 Cities Where Renting Is Much Cheaper Than Buying a Starter Home
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Even as rent prices soar, taking out a lease is cheaper than taking out a mortgage in most big U.S. cities.
In more than 75% of the largest 50 markets in the U.S., renting costs less than buying a starter home, according to Realtor.com’s Monthly Rental Report. For the sake of comparison, back in January renting was more favorable than buying in slightly less than 50% of these markets.
Between January and June, the difference between the cost of buying a starter home and median rent has widened by more than 25%, the report states. It's now quite a significant gap: In June, the typical monthly mortgage payment on a starter home was $2,437 — about $560 higher than the average rent.
Rising mortgage rates are the main reason why renting is more affordable in some markets, notes Danielle Hale, chief economist for Realtor.com. Mortgage rates have soared since the start of 2022, and as a result the monthly payment on a median-priced home has increased from $1,867 in January to $2,100 now.
