Top Three Metros Where Renting Beats Out
Buying Include Austin-Round Rock-Georgetown, Texas with a $2120 Monthly Savings, Seattle-Tacoma-Bellevue,
Wa. with a $2,222 Monthly
Saving and Los Angeles-Long
Beach-Anaheim, Calif. With
a $2,784 Monthly
Savings
SANTA
CLARA, Calif., Aug. 15,
2024 /PRNewswire/ -- As rents continue to fall in
July, all 50 largest U.S. metros favor renting a starter home
compared to buying, according to the Realtor.com® Rental
Report released today (see full list below). This continues a trend
seen in February as elevated mortgage rates, high home prices and
falling rents contribute to the over $1,000 savings in renting over buying. At the
same time last year, only 47 metros favored renting.
"For every major U.S. metro, renting a starter home continues to
be more affordable than buying a starter home, continuing a trend
we saw this February as rents declined and home prices continued to
grow," said Ralph McLaughlin, senior
economist at Realtor.com®. "However, we are
starting to see the advantage of renting over buying decrease
across several metros, especially as more affordable inventory hits
the market. It has been a challenging time for potential first-
time homebuyers, especially as rents have been so favorable, but
with mortgage relief finally on the way, we might continue to see
the advantage of renting shrink, giving homebuyers a path into
their first home."
Additionally, this July marks the twelfth year-over-year rent
decline in a row for 0–2-bedroom properties.
The top 10 metros with the largest rent versus buy savings
(see below for top 50 metros):
- Austin-Round Rock-Georgetown, Texas –buying cost 144.4% more
than renting ($2,120 monthly rent
savings)
- Seattle-Tacoma-Bellevue,
Wash. – 107.7% ($2,222)
- Los Angeles-Long
Beach-Anaheim, Calif.
–99.5% ( $2,784)
- Nashville-Davidson-Murfreesboro-Franklin, Tenn. –93.3% ($1,399)
- Phoenix-Mesa-Chandler,
Ariz. –91.6% ($1,396 )
- Columbus, Ohio –91.3% (
$1,090 )
- Dallas- Fort
Worth-Arlington, Texas –
88.3% ($1,307)
- San Francisco-Oakland-Berkeley,
Calif. –88.2% ($2,442 )
- New York-New Jersey-Jersey
City, N.Y., N.J., Pa. – 81.1% ( $2,342)
- Boston-Cambridge-Newton,
Mass. –78.6% ($2,336)
Renting a starter home continues to be a more affordable
option in all 50 metros
A common question potential
first-time homebuyers face is whether it makes sense to continue
renting or if it's time to make a home purchase, and one of the top
considerations is the financial costs and benefits of renting
versus owning. In July 2024, the cost
of buying a starter home in the top 50 metros was $1,067 or 61.3% higher a month than renting one.
This year, renting is a more affordable option than buying in all
of the 50 largest metros, growing from last July, when only 47
metros saw rent as the more affordable option. Specifically,
Memphis, Tenn., Birmingham, Ala., and Pittsburgh, Penn., were the three metros that
flipped from buy-favoring to rent-favoring markets over the past 12
months.
Austin, Texas, where the
monthly cost of buying a starter home was $3,558 – 144.4% more than the monthly rent of
$1,468, for a monthly savings of
$2,120 – topped the list of markets
most favoring renting. Other top markets favoring renting over
buying were Seattle, Los Angeles, San
Francisco and New York.
While Dallas, Texas and
Columbus, Ohio have relatively
lower buy cost, the affordable rental prices in these two markets
propelled them to the top ten rent-favoring metros.
Change on the Horizon? The Advantage of Renting Shrank in
Many Metros
Compared to last year, the advantage of
renting shrank by 2 percentage points propelled by a greater influx
of smaller and more affordable homes for sale leading to a slight
decline in listing prices for starter homes. Last July, the average
monthly cost of buying a starter home in the top 50 metros was
63.3% higher than renting, this July the cost of buying a starter
home is 61.3% higher than renting. Although the overall
advantage of renting narrowed by 2 percentage points or
$42 across the top 50 metros compared
to a year ago, it was still $758
higher when compared to five years ago (pre-pandemic).
Over the past year 23 of the top 50 markets saw a diminishing
rent advantage over the past 12 months and this advantage shrank
the most in San Francisco, Calif.
San Jose, Calif, Denver, Colo., Washington, D.C., and Miami, Fla. It is not surprising to see the
rent advantage diminished most in these metros as homes in these
markets experienced large listing price declines on a yearly
basis.
However, not every metro saw a diminishing advantage in renting.
In fact Memphis, Tenn., and
Birmingham, Ala. are two metros
who became rent-favoring over the last 12 months, where we
see a large share of home buying activity from investors.
Top metros with diminishing advantage in renting (Dollar
amount difference from July 2023 to
July 2024)
- San Francisco-Oakland-Berkeley,
Calif. – -$563
- San Jose-Sunnyvale-Santa
Clara, Calif. – -$468
- Denver-Aurora-Lakewood,
Colo. – -$314
- Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va – -$282
- Miami-Fort Lauderdale-Pompano Beach, Fla. – -$273
Top metros with increasing advantage in renting (Dollar
amount difference from July 2023 to
July 2024)
- Memphis, Tenn.-Miss.-Ark. –
$246
- Birmingham-Hoover, Ala. – $209
- New York-New Jersey-Jersey
City, N.Y., N.J., Pa – $173
- Los Angeles-Long
Beach-Anaheim, Calif. –
$156
- Richmond - Va. – $130
Realtor.com®'s rent versus buy calculator can help
consumers determine if the cost of homeownership is a better deal
than renting based on their location and budget.
National Rental Data –
July2024
|
Unit
Size
|
Median
Rent
|
Rent
YoY
|
Rent Change – 5
years (July 2019)
|
|
Overall
|
$1,741
|
-0.7 %
|
19.8 %
|
|
Studio
|
$1,460
|
-0.9 %
|
15.1 %
|
|
1-bed
|
$1,615
|
-1.4 %
|
17.7 %
|
|
2-bed
|
$1,933
|
-0.6 %
|
21.7 %
|
Rental Data – 50 Largest Metropolitan Areas – July 2024
|
Metro
|
Median Rent
|
Monthly Buy
Cost
|
$Difference
(Buy-Rent)
|
% Difference
(Buy-Rent)
|
Rent Cost:
YY
|
Buy Cost:
YY
|
|
Atlanta-Sandy
Springs-
Roswell, GA
|
$1,585
|
$2,497
|
$912
|
57.5 %
|
-6.1 %
|
-2.3 %
|
|
Austin-Round Rock,
TX
|
$1,468
|
$3,588
|
$2,120
|
144.4 %
|
-10.2 %
|
-10.7 %
|
|
Baltimore-Columbia-
Towson, MD
|
$1,807
|
$2,135
|
$328
|
18.2 %
|
-2.5 %
|
3.1 %
|
|
Birmingham-Hoover,
AL
|
$1,305
|
$1,410
|
$105
|
8.0 %
|
0.5 %
|
18.0 %
|
|
Boston-Cambridge-
Newton, MA-NH
|
$2,973
|
$5,309
|
$2,336
|
78.6 %
|
-2.5 %
|
-2.9 %
|
|
Buffalo-Cheektowaga-
Niagara Falls, NY
|
$1,274
|
$2,168
|
$894
|
70.2 %
|
16.0 %
|
0.4 %
|
|
Charlotte-Concord-
Gastonia, NC-SC
|
$1,516
|
$2,226
|
$710
|
46.8 %
|
-6.1 %
|
-2.8 %
|
|
Chicago-Naperville-Elgin,
IL-IN-WI
|
$1,839
|
$2,719
|
$880
|
47.9 %
|
0.2 %
|
0.0 %
|
|
Cincinnati,
OH-KY-IN
|
$1,389
|
$1,997
|
$608
|
43.8 %
|
2.9 %
|
-4.9 %
|
|
Cleveland-Elyria,
OH
|
$1,214
|
$1,773
|
$559
|
46.0 %
|
0.1 %
|
6.6 %
|
|
Columbus, OH
|
$1,194
|
$2,284
|
$1,090
|
91.3 %
|
-1.9 %
|
-0.2 %
|
|
Dallas-Fort Worth-
Arlington, TX
|
$1,481
|
$2,788
|
$1,307
|
88.3 %
|
-4.1 %
|
-5.9 %
|
|
Denver-Aurora-
Lakewood, CO
|
$1,924
|
$3,199
|
$1,275
|
66.3 %
|
-1.5 %
|
-9.7 %
|
|
Detroit-Warren-
Dearborn, MI
|
$1,339
|
$1,755
|
$416
|
31.1 %
|
2.2 %
|
8.7 %
|
|
Hartford-West
Hartford-
East Hartford, CT
|
$1,837
|
$2,514
|
$677
|
36.9 %
|
8.0 %
|
15.4 %
|
|
Houston-The
Woodlands-Sugar Land,
TX
|
$1,402
|
$2,442
|
$1,040
|
74.2 %
|
-2.2 %
|
-4.6 %
|
|
Indianapolis-Carmel-A
nderson, IN
|
$1,324
|
$1,842
|
$518
|
39.1 %
|
1.1 %
|
0.4 %
|
|
Jacksonville,
FL
|
$1,508
|
$2,440
|
$932
|
61.8 %
|
-5.0 %
|
-2.4 %
|
|
Kansas City,
MO-KS
|
$1,347
|
$1,771
|
$424
|
31.5 %
|
1.2 %
|
1.6 %
|
|
Las
Vegas-Henderson-
Paradise, NV
|
$1,470
|
$2,318
|
$848
|
57.7 %
|
-3.9 %
|
0.5 %
|
|
Los Angeles-Long
Beach-Anaheim, CA
|
$2,797
|
$5,581
|
$2,784
|
99.5 %
|
-1.8 %
|
1.9 %
|
|
Louisville/Jefferson
County, KY-IN
|
$1,245
|
$1,706
|
$461
|
37.0 %
|
-2.8 %
|
3.6 %
|
|
Memphis,
TN-MS-AR
|
$1,229
|
$1,439
|
$210
|
17.1 %
|
-3.9 %
|
15.8 %
|
|
Miami-Fort
Lauderdale-
West Palm Beach, FL
|
$2,368
|
$3,176
|
$808
|
34.1 %
|
-3.5 %
|
-10.1 %
|
|
Milwaukee-Waukesha-
West Allis, WI
|
$1,717
|
$2,352
|
$635
|
37.0 %
|
3.5 %
|
1.3 %
|
|
Minneapolis-St.
Paul-
Bloomington, MN-WI
|
$1,559
|
$2,501
|
$942
|
60.4 %
|
4.4 %
|
-6.2 %
|
|
Nashville-Davidson–
Murfreesboro–Franklin, TN
|
$1,500
|
$2,899
|
$1,399
|
93.3 %
|
-10.1 %
|
-1.8 %
|
|
New
Orleans-Metairie,
LA
|
$1,242
|
$2,383
|
$1,141
|
91.9 %
|
-4.0 %
|
0.8 %
|
|
New York-Newark-
Jersey City, NY-NJ-PA
|
$2,887
|
$5,229
|
$2,342
|
81.1 %
|
0.4 %
|
3.6 %
|
|
Oklahoma City,
OK
|
$1,014
|
$1,594
|
$580
|
57.2 %
|
-0.4 %
|
-13.1 %
|
|
Orlando-Kissimmee-
Sanford, FL
|
$1,672
|
$2,211
|
$539
|
32.2 %
|
-4.8 %
|
-3.0 %
|
|
Philadelphia-Camden-
Wilmington, PA-NJ-DE-MD
|
$1,823
|
$2,518
|
$695
|
38.1 %
|
-0.4 %
|
3.1 %
|
|
Phoenix-Mesa-
Scottsdale, AZ
|
$1,524
|
$2,920
|
$1,396
|
91.6 %
|
-5.6 %
|
-1.4 %
|
|
Pittsburgh,
PA
|
$1,484
|
$1,492
|
$8
|
0.5 %
|
2.7 %
|
4.3 %
|
|
Portland-Vancouver-
Hillsboro, OR-WA
|
$1,748
|
$3,106
|
$1,358
|
77.7 %
|
3.9 %
|
-4.6 %
|
|
Providence-Warwick,
RI-
MA
|
$2,158
|
$3,340
|
$1,182
|
54.8 %
|
5.3 %
|
7.5 %
|
|
Raleigh, NC
|
$1,533
|
$2,622
|
$1,089
|
71.0 %
|
-3.6 %
|
0.3 %
|
|
Richmond, VA
|
$1,513
|
$2,486
|
$973
|
64.3 %
|
-2.8 %
|
3.6 %
|
|
Riverside-San
Bernardino-Ontario, CA
|
$2,169
|
$3,246
|
$1,077
|
49.7 %
|
0.2 %
|
1.9 %
|
|
Rochester,
NY
|
$1,385
|
$2,920
|
$1,535
|
110.8 %
|
7.9 %
|
4.0 %
|
|
Sacramento–Roseville–
Arden-Arcade, CA
|
$2,023
|
$3,602
|
$1,579
|
78.1 %
|
8.3 %
|
-2.1 %
|
|
San Antonio-New
Braunfels, TX
|
$1,232
|
$2,035
|
$803
|
65.2 %
|
-7.8 %
|
-11.9 %
|
|
San Diego-Carlsbad,
CA
|
$2,919
|
$5,051
|
$2,132
|
73.0 %
|
-1.3 %
|
-4.4 %
|
|
San
Francisco-Oakland-
Hayward, CA
|
$2,770
|
$5,212
|
$2,442
|
88.2 %
|
-5.4 %
|
-12.1 %
|
|
San Jose-Sunnyvale-
Santa Clara, CA
|
$3,390
|
$6,003
|
$2,613
|
77.1 %
|
4.1 %
|
-5.3 %
|
|
Seattle-Tacoma-
Bellevue, WA
|
$2,064
|
$4,286
|
$2,222
|
107.7 %
|
0.6 %
|
-5.4 %
|
|
St. Louis,
MO-IL
|
$1,327
|
$1,549
|
$222
|
16.7 %
|
-0.4 %
|
7.9 %
|
|
Tampa-St.
Petersburg-
Clearwater, FL
|
$1,746
|
$2,564
|
$818
|
46.8 %
|
-2.2 %
|
-5.8 %
|
|
Virginia
Beach-Norfolk-
Newport News, VA-NC
|
$1,560
|
$1,944
|
$384
|
24.6 %
|
4.4 %
|
-3.5 %
|
|
Washington-Arlington-
Alexandria,DC-VA-MD-
WV
|
$2,273
|
$3,261
|
$988
|
43.5 %
|
0.4 %
|
-7.7 %
|
Methodology
Rental data as of July 2024 for studio, 1-bedroom, or 2-bedroom
units advertised as for-rent on Realtor.com®. Rental
units include apartments as well as private rentals (condos,
townhomes, single-family homes). We use rental sources that
reliably report data each month within the top 50 largest
metropolitan areas. Realtor.com® began publishing
regular monthly rental trends reports in October 2020 with data history stretching back to
March 2019.
The monthly cost of buying a home was 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. Monthly
buying costs assume a 8% down payment, with a mortgage rate of
6.85%, and include taxes, insurance and HOA fees.
With the release of its July 2024
rent report, Realtor.com® incorporated a new and improved
methodology for capturing and reporting more comprehensive rental
listing trends and metrics. The new methodology is expected to
yield a cleaner, more representative and more consistent
measurement of rental listings and trends at both the national and
local level. The methodology has been adjusted to better represent
the true cost of primary housing for renters. Most areas across the
country will see minor changes with a smaller handful of areas
seeing larger updates. As a result of these changes, the rental
data released since July 2024 will
not be directly comparable with previous releases and Realtor.com®
economics blog posts. However, future data releases, including
historical data, will consistently apply the new methodology.
About
Realtor.com®
Realtor.com® is an
open real estate marketplace built for everyone.
Realtor.com® pioneered the world of digital real
estate more than 25 years ago. Today, through its website and
mobile apps, Realtor.com® is a trusted guide for
consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
and creating confidence through expert insights and guidance. For
professionals, Realtor.com® is a trusted partner
for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more
information, visit Realtor.com®.
Media Contact: Mallory Micetich,
press@realtor.com
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content:https://www.prnewswire.com/news-releases/realtorcom-july-rental-report-renting-still-beats-buying-in-all-of-the-largest-us-metros-302222800.html
SOURCE Realtor.com
