Renting a home is now cheaper than buying one in all big cities in the United States, according to a new analysis.
The monthly cost of buying a home across all 50 of the largest metro statistical areas (MSA) in the U.S. is 37% more expensive than renting a typical home, a new Bankrate analysis found. The typical monthly mortgage payment of a median-priced home, which was $412,778 as of February, is $2,703. In comparison, the typical rent in February was $1,979.
"For those weighing whether they should rent or buy right now, all signs point to renting as the most cost-effective option in most major U.S. cities," Bankrate Analyst Alex Gailey said in a statement.
Metros With the Biggest Gaps Between Buying and Renting
In 21 of the 50 largest metro areas in the US, the typical monthly cost of owning a home is at least 50% more expensive than the average monthly cost of renting. These metros see more competition in the housing market and higher home prices, Bankrate noted.
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San Francisco-Oakland-Berkeley, CA: The average monthly rent is $3,204, while the typical monthly mortgage payment is $8,486. This marks a 180.7% gap between buying and renting.
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San Jose-Sunnyvale-Santa Clara, CA: The typical monthly rent is $3,255, at least 162.3% lower than the monthly mortgage payment of $8,539.
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Seattle-Tacoma-Bellevue, WA: The monthly rent of $2,191 is 125% lower than the monthly mortgage payment of $4,930
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Salt Lake City, UT: Average monthly rent is $1,673 compared to the average $3,161 mortgage payment for an 89% gap.
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Austin-Round Rock-Georgetown, TX: Monthly rent is $1,753 on average vs a mortgage payment of $3,269 for an 86.5% gap
Metros With the Smallest Gaps Between Buying and Renting
The cost of living in the Northeast and Midwest tends to be lower than in other regions. However, Bankrate said it is still cheaper to rent than buy a home in the area.
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Detroit-Warren-Dearborn, Michigan: The typical monthly rent is $1,395, while the average monthly mortgage payment is $1,423. This marks a 2% gap.
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Pittsburgh: The average monthly rent is $1,415 compared with a typical mortgage payment of $1,488 for a 5.1% gap.
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Philadelphia-Camden-Wilmington-Pennsylvania-New Jersey-Delaware-Maryland: A month of rent is $1,829, while a mortgage payment is $1,988 on average. This marks an 8.7% gap.
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Cleveland-Elyria, Ohio: Monthly rent is $1,377 and a mortgage payment is $1,537 for an 11.6% gap.
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Buffalo-Cheektowaga, New York: The average monthly rent is $1,295, or 20.2% lower than the average $1,556 mortgage payment.
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