Renting Outshines Buying for Starter Homes in 49 of the 50 Largest U.S. Metro Areas

Renting continues to provide significant monthly savings compared to buying in most regions of the United States. However, an economist suggests that the long-standing affordability gap is gradually narrowing.

According to Realtor.com senior economist Joel Berner, renting remains considerably more affordable than purchasing a starter home in 49 of the 50 largest metropolitan areas across the U.S., with Pittsburgh being the sole exception. This trend has persisted since Realtor.com released its June 2025 report, which indicated that renting saves individuals over $900 each month compared to buying a starter home.

It’s essential to note that this analysis focuses solely on monthly costs and does not account for the equity accumulation associated with homeownership versus renting.

Renting still offers significant monthly savings over buying in most of the country, experts say. (Joe Raedle/Getty Images)

When contemplating homeownership, it’s crucial to consider the long-term benefits. “In the long term, owning a home exposes you to the appreciation in the value of your property,” Berner explained. “Your monthly payments that build up your ownership stake in the home can be seen as a money-making proposition rather than just an expense like paying rent.”

Despite these long-term financial advantages, many potential buyers remain on the sidelines. THESE 10 MARKETS MAY SEE THE BIGGEST HOMEBUYING SURGE AS MORTGAGE RATES FALL

First-time buyers are particularly struggling to enter the market due to elevated borrowing rates and home prices. These higher monthly housing payments have compelled many households to remain in rentals longer, allowing them to save, pay down debt, or avoid stretching their budgets too thin.

FED CUTS INTEREST RATES FOR THIRD STRAIGHT TIME AMID UNCERTAINTY OVER LABOR MARKET, INFLATION

It’s been particularly difficult to break into the market for first-time buyers in the current economy as borrowing rates and home prices have remained elevated. (Frederic J. Brown/AFP via Getty Images)

Redfin chief economist Daryl Fairweather stated that while monthly rental payments are still lower than monthly mortgage payments, the gap is narrowing.

RYAN SERHANT SAYS HIS DAUGHTER WILL HAVE TO ‘FIGURE IT OUT’ AS HOUSING MARKET RESETS FOR GEN Z

Fairweather noted that borrowing to purchase a home has become more affordable this year. Although the decrease wasn’t dramatic, the mortgage payment on a median-priced home fell by 0.7% since last year, while asking rents increased by 2.6% during the same period.

A house for sale in the Capitol Hill neighborhood of Washington, D.C., on July 30, 2024.  (Tierney L. Cross/Bloomberg via Getty Images)

For instance, Fairweather highlighted a condo in Austin currently listed for $199,000, which translates to a $985 monthly mortgage payment at a 6.3% interest rate with 20% down. This figure does not account for HOA fees, insurance, or taxes. In contrast, that same condo was listed for rent at $800 per month back in October.

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Realtor.com senior analyst Hannah Jones remarked that while the gap between renting and buying is closing, “it’s closing from a really massive gap to a little bit less massive gap in a lot of places.”

Renting continues to provide significant monthly savings compared to buying in most regions of the United States. However, an economist suggests that the long-standing affordability gap is gradually narrowing.

According to Realtor.com senior economist Joel Berner, renting remains considerably more affordable than purchasing a starter home in 49 of the 50 largest metropolitan areas across the U.S., with Pittsburgh being the sole exception. This trend has persisted since Realtor.com released its June 2025 report, which indicated that renting saves individuals over $900 each month compared to buying a starter home.

It’s essential to note that this analysis focuses solely on monthly costs and does not account for the equity accumulation associated with homeownership versus renting.

Renting still offers significant monthly savings over buying in most of the country, experts say. (Joe Raedle/Getty Images)

When contemplating homeownership, it’s crucial to consider the long-term benefits. “In the long term, owning a home exposes you to the appreciation in the value of your property,” Berner explained. “Your monthly payments that build up your ownership stake in the home can be seen as a money-making proposition rather than just an expense like paying rent.”

Despite these long-term financial advantages, many potential buyers remain on the sidelines. THESE 10 MARKETS MAY SEE THE BIGGEST HOMEBUYING SURGE AS MORTGAGE RATES FALL

First-time buyers are particularly struggling to enter the market due to elevated borrowing rates and home prices. These higher monthly housing payments have compelled many households to remain in rentals longer, allowing them to save, pay down debt, or avoid stretching their budgets too thin.

FED CUTS INTEREST RATES FOR THIRD STRAIGHT TIME AMID UNCERTAINTY OVER LABOR MARKET, INFLATION

It’s been particularly difficult to break into the market for first-time buyers in the current economy as borrowing rates and home prices have remained elevated. (Frederic J. Brown/AFP via Getty Images)

Redfin chief economist Daryl Fairweather stated that while monthly rental payments are still lower than monthly mortgage payments, the gap is narrowing.

RYAN SERHANT SAYS HIS DAUGHTER WILL HAVE TO ‘FIGURE IT OUT’ AS HOUSING MARKET RESETS FOR GEN Z

Fairweather noted that borrowing to purchase a home has become more affordable this year. Although the decrease wasn’t dramatic, the mortgage payment on a median-priced home fell by 0.7% since last year, while asking rents increased by 2.6% during the same period.

A house for sale in the Capitol Hill neighborhood of Washington, D.C., on July 30, 2024.  (Tierney L. Cross/Bloomberg via Getty Images)

For instance, Fairweather highlighted a condo in Austin currently listed for $199,000, which translates to a $985 monthly mortgage payment at a 6.3% interest rate with 20% down. This figure does not account for HOA fees, insurance, or taxes. In contrast, that same condo was listed for rent at $800 per month back in October.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Realtor.com senior analyst Hannah Jones remarked that while the gap between renting and buying is closing, “it’s closing from a really massive gap to a little bit less massive gap in a lot of places.”