In today’s housing market, renting has become a more financially viable option than owning a home with a mortgage in many parts of the United States. An analysis by LendingTree highlights that in all of the 100 largest U.S. metro areas, renting is cheaper than buying a home. This shift is primarily due to rising mortgage rates and persistent high home prices, making the financial gap between renting and owning more pronounced.
For instance, in cities like San Francisco, renters save approximately $1,414 per month compared to homeowners. Similarly, the gap in New York is around $1,340. Even in areas with the smallest differences, such as Phoenix and Orlando, renting remains the cheaper option.
The study found that the median rent in the U.S. was $1,406 per month in 2023, while the median monthly cost for a home with a mortgage was $1,904, resulting in a $498 difference. The largest cost gaps are found in high-priced coastal metros like San Francisco and New York.
Several factors contribute to this trend. The average 30-year fixed mortgage rate is near 7%, making homeownership less affordable. Moreover, home prices have not significantly dropped and remain above $400,000 in many regions. Renters benefit from lower upfront costs, no property taxes, and fewer maintenance expenses, which contributes to the appeal of renting over buying.
For those considering their housing options, it’s essential to evaluate financial stability, long-term goals, and local market conditions. While renting is currently more affordable, homeownership can still offer long-term investment benefits for those planning to settle in one place for an extended period.
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