Housing

The City Where It Is Better to Rent Than Buy

RoschetzkyIstockPhoto / iStock via Getty Images

Home prices skyrocketed for two years but that ended about six months ago. The surge was brought on by low mortgage rates and the ability of people to work from home due to the COVID-19 pandemic. Many of those not tethered to an office moved. The demand these factors caused pushed prices higher in many American cities, and in most cases, those increases were by double-digit percentages. Rentals were often cheaper than owning homes. (Click here to see the best cities in which to rent new apartments.)
[in-text-ad]
The city where renting was more financially advantageous was Austin, Texas, one of America’s fastest-growing and most expensive cities.

According to Realtor.com’s December Rental Report: Despite Rent Growth, Renting a Starter Home Is More Affordable Than Buying: “In 45 of the 50 largest U.S. metros, the monthly cost of renting a home is lower than buying a starter home, and despite higher rents, renting has become relatively more affordable than buying year-over-year.”


Homeownership was 121% higher in Austin than renting, based on the monthly cost. The cost of owning a home was $3,682 a month, compared to rent of $1,695. Austin is among the most expensive home markets in America.

These are the markets where home ownership is more than 65% than renting:

Metro Median Rent Monthly Buy Cost % Difference
Austin $1,659 $3,672 121.3
San Francisco $2,943 $5,798 97.0
Seattle $2,059 $3,831 86.1
San Jose $3,156 $5,777 83.0
San Diego $2,702 $4,787 77.2
Los Angeles $2,870 $5,020 74.9
Boston $2,868 $4,965 73.1
Portland $1,750 $2,996 71.2
Phoenix $1,592 $2,708 70.1
Sacramento $1,834 $3,075 67.7

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.