Whether you rent your home or are in the market to buy, there’s hasn’t been any good news about availability or affordability in a long time. Purchase prices have shot to record highs, and rent has seen double-digit growth every month for the last seven months, up 17.1% in February 2022 over the previous year, according to a report from listing site Realtor.com. Simply put, housing is expensive.
There are a handful of places—mostly in small to mid-size cities between the East Coast and the Midwest—where home ownership doesn’t seem entirely out of reach. And there are some metro areas where rent has shot up so fast that it may actually cheaper, on the whole, to buy. Data released last month from the real estate listing site found that the monthly cost of a starter home is more affordable than renting in 26 of 50 metro areas.
Where is it cheaper to buy rather than rent a home?
A few big caveats up front: Realtor.com’s calculations assume that a prospective homeowner makes a 7% down payment (which is not nothing) and has a mortgage rate of 3.45%. The monthly cost to buy is a weighted average of listing prices for studio, one-bedroom, and two-bedroom properties.
Most of the buy-over-rent metros are in the eastern half of the United States:
- Birmingham, Ala.: $1,201 monthly rent vs. $668 buy
- Cleveland: $1,325 monthly rent vs. $809 buy
- Pittsburgh: $1,530 monthly rent vs. $945 buy
- St. Louis: $1,295 monthly rent vs. $812 buy
- Detroit: $1,295 monthly rent vs. $901 buy
- Baltimore: $1,773 monthly rent vs. $1,242 buy
- Virginia Beach, Va.: $1,500 monthly rent vs. $1,091 buy
- Orlando, Fla.: $1,820 monthly rent vs. $1,327 buy
- Tampa, Fla.: $2,070 monthly rent vs. $1,543 buy
Meanwhile, the metro areas where buying seems completely out of reach even in the face of skyrocketing rents are all the places you would expect: Austin, New York City, San Francisco, San Jose, and Seattle round out the top five.