Where Starter Homes Cheaper than Renting

With rent prices soaring, buying a starter home is more affordable than renting in nearly half of the largest metros in the country.

Median Rents Climbed Nearly +10% y/y in July

For agents with first-time buyers, it’s important to know that starter homes in nearly 50% of the country’s largest metros are more affordable than renting.

The median rental price in July climbed to $1,607 in July.  This $1,607 figure represents a nearly +10% y/y increase.  This $1,607 is also +15.5% higher than monthly mortgage payments on a starter home.

“Rents hit new highs in 40 of the 50 largest US metros this July and grew at an almost double-digit pace – the fastest yearly rate we’ve seen in the last 18 months,” said realtor.com’s chief economist Danielle Hale.  “Sky-high rents and historically low interest rates have made the monthly cost to buy a starter home lower than renting one in nearly half the markets across the US.”

Costs of starter homes averaged -15.5% or -$216/month less than rents.

Markets Favoring Buying Over Renting

1. Birmingham-Hoover AL
   33. % Cost Difference – -33.1%
   34. $ Cost Difference – -$361
   35. Median rent – $1,089
   36. Monthly Buy Cost – $728
   37. Rent y/y – 12.3%
   38. Buy Cost y/y – 28.2%
2. St. Louis MO-Il
   • % Cost Difference – -29.4%

1. $ Cost Difference – -$340
2. Median rent – $1,155
3. Monthly Buy Cost – $815

• Rent y/y – 7.4%

13. Buy Cost y/y – 13.7%

3. Pittsburgh PA
   27. % Cost Difference – -27.7%
   28. $ Cost Difference – -$381
   29. Median Rent – $1,376
   30. Monthly Buy Cost – $995
   31. Rent y/y – 8.3%
   32. Buy Cost y/y – 18.9%
4. Orlando-Kissimmee-Sanford FL
   • % Cost Difference – -25.9%

1. $ Cost Difference – -$403
2. Median Rent – $1,557
3. Monthly Buy Cost – $1,154
4. Rent y/y – 16.2%
5. Buy Cost y/y – 4.5%

5. Cleveland-Elyria OH
   25. % Cost Difference – -25.7%
   26. $ Cost Difference – -$280
   27. Median Rent – $1,089
   28. Monthly Buy Cost – $809
   29. Rent y/y – 6.8%
   30. Buy Cost y/y – 2.4%
6. Tampa-St. Petersburg-Clearwater FL
   22. % Cost Difference – -22.9%
   23. S Cost Difference – -$389
   24. Median Rent – $1,698
   25. Monthly Buy Cost – $1,309
   26. Rent y/y – 27.2%
   27. Buy Cost y/y – 15.1%
7. Baltimore-Columbia-Towson MD
   20. % Cost Difference – -20.5%
   21. $ Cost Difference – -$337
   22. Median Rent – $1,647
   23. Monthly Buy Cost – $1,310
   24. Rent y/y – 6.8%
   25. Buy Cost y/y -7.8%
8. Indianapolis-Carmel-Anderson IN
   20. % Cost Difference – -20.4%
   21. $ Cost Difference – -$235
   22. Median Rent – $1,150
   23. Monthly Buy Cost – $915
   24. Rent y/y – 13.5%
   25. Buy Cost y/y – 4.9%
9. Virginia Beach-Norfolk-Newport News VA-NC
   19. % Cost Difference – -19.2%
   20. $ Cost Difference – =$256
   21. Median Rent – $1,330
   22. Monthly Buy Cost – $1,074
   23. Rent y/y – 11/9%
   24. Buy Cost y/y – 3.1%
10. Riverside-San Bernardino-Ontario CA
    18. % Cost Difference – -18.5%
    19. $ Cost Difference – -$413
    20. Median Rent – $2,230
    21. Monthly Buy Cost – $1,817
    22. Rent y/y – 29.7%
    23. Buy Cost y/y – 17.7%

Thanks to Realtor.com.