Renting Is Officially Cheaper Than Buying

By: Anneken Tappe · April 04, 2024 · Reading Time: 3 minutes

Buying a home is now more expensive than renting one in America’s 50 largest metropolitan areas. This might be good news for renters, but it also brings up an important aspect of homebuying: It’s not just about the place you might choose to live. It’s also about building wealth.

According to’s February Rental Report , the average mortgage payment for a starter home is $1,027 in the 50 biggest U.S. metro areas, more than a comparable rental payment in the same area. Of course, the cost of buying a home depends on many factors, including location, mortgage rate, and down payment. But it signals how much the homebuying math has changed over the past years.

Rent Respite

Renters across America may finally get a bit of a break after several years of surging rent prices.

According to’s data, in February the median rent for a 0-2 bedroom apartment year-over-year declined for the seventh consecutive month. Rent prices vary widely depending on location, with the national median currently sitting at $1,426 for a studio, $1,587 for a 1-bedroom, and $1,889 for a 2-bedroom apartment. A surge of new units has helped stabilize rent prices in many areas.

But not every renter will immediately feel relief. That’s the thing with rents, usually renters are locked in for a period, such as a year or two.

The Silver Lining for Homebuyers

Meanwhile, prospective homebuyers continue to face elevated borrowing costs and steep home prices, which is pushing up the monthly cost of homeownership. But there’s more to buying a home.

For example, it may be preferable in terms of investing for the future. Homeownership is a cornerstone of building generational wealth, one one of the major components of household wealth on the whole. While mortgage rates remain elevated in the wake of the Federal Reserve’s fight against inflation, the central bank expects rate cuts later this year. For prospective homebuyers, this could mean some relief is on the horizon.

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