Tenants often endure the putdown that they are simply “throwing away” their money by paying rent instead of owning a home.But in some places, those renters are getting the last laugh.
A recent Realtor.com analysis finds that due to falling rents and stubbornly high home prices, as of February, it was cheaper to rent than buy a home in all of the 50 largest metropolitan areas in the United States.
The cost of renting is particularly cheap compared with the cost of buying a starter home in some metros.
In calculating these figures, Realtor.com used rental data from February for studio, one-bedroom or two-bedroom units advertised as for-rent on Realtor.com. Rental units include apartments, condos, townhomes and single-family homes.
Realtor.com then looked at the monthly cost of buying a home “calculated by averaging the median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market.”
Buying costs included:
- 8% down payment
- Mortgage rate of 6.78%
- Taxes, insurance and homeowners association fees
Here are the areas where it is significantly cheaper to rent than buy.
10. Houston
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 80% more expensive
Median monthly rent: $1,379
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $2,482
No city in the United States is more ethnically diverse than Houston. At least 145 languages are spoken in the metro, and 90 nations have consular representation here.
9. Sacramento, California
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 82.1% more expensive
Median monthly rent: $1,845
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $3,359
Sacramento‘s Great Flood of 1862 could not prevent Leland Stanford from taking office as California’s governor. Stanford simply traveled to his inauguration by rowboat.
8. Portland, Oregon
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 84.4% more expensive
Median monthly rent: $1,655
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $3,051
If you love beer, Portland, Oregon, is a little slice of heaven: It has more than 60 breweries — more than any other city in the United States.
7. Nashville, Tennessee
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 86% more expensive
Median monthly rent: $1,589
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $2,955
Want to see the Parthenon without the hassle of flying to Greece? Nashville‘s replica — built in 1897 — is the only one in the world.
6. San Jose, California
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 86.7% more expensive
Median monthly rent: $3,206
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $5,986
At one time, San Jose was the capital of California. The state’s leaders gathered there in a two-story hotel, but it burned down in 1853. The following year, the Legislature moved to the city of Sacramento, which officially became the capital in 1879.
5. Los Angeles
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 89.7% more expensive
Median monthly rent: $2,830
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $5,369
There are a lot of people in Los Angeles. The five-county area has more residents than the total populations of all but four states: California, Texas, New York and Florida.
4. San Francisco
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 95.5% more expensive
Median monthly rent: $2,815
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $5,504
San Francisco’s iconic Golden Gate Bridge was not intended to be its present color. But when the steel for the bridge arrived painted in orange-red primer, consulting architect Irving F. Morrow decided to stick with it.
3. Phoenix
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 99% more expensive
Median monthly rent: $1,543
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $3,071
Yes, Arizona’s capital is in the desert, but that doesn’t mean the region is bone-dry: You can find six lakes within a 75-minute drive of downtown Phoenix.
2. Seattle
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 121.1% more expensive
Median monthly rent: $2,000
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $4,422
Despite the cloudy weather, Seattle has a history of buying about 50% more sunglasses per capita than the national average. The Washington city’s northern location means the sun sits lower, making it more level with people’s eyes.
1. Austin, Texas
As of February 2024, in this metro…
The cost of buying a starter home compared with renting: 141.5% more expensive
Median monthly rent: $1,530
Monthly homeowner costs (mortgage, property taxes, insurance and HOA dues): $3,695
Forget MTV: The city of Austin is home to the nation’s longest-running music television program, “Austin City Limits.” It debuted in 1947 and featured a performance by Willie Nelson.
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