Why Buying is Now More Affordable Than Renting in 22 Major U.S. Cities

According to a recent study by Zillow, in 22 of the top 50 largest U.S. metro areas, monthly mortgage payments have dropped below rent payments (see chart below:)

 

This shift marks a significant change in the housing market, creating a golden opportunity for potential homeowners.

With mortgage rates easing, home prices leveling off, and inventory on the rise, home affordability has greatly improved. In many cities across the country, it’s now cheaper to own a home than to continue renting.

For those who've been renting for a long time, this news could be a game changer. And even if your city isn’t currently on the list, don’t lose hope. Housing markets can shift quickly, and your area may soon be following suit.

That’s why now is the perfect time to talk to a local real estate agent. With expert insight, you can get ahead of the curve and explore whether buying in your dream neighborhood is becoming a more viable option.

It’s important to note, however, that while this study compares monthly rent to principal and interest on mortgage payments, it doesn’t account for the entire monthly cost of homeownership. You’ll also need to consider property taxes, homeowner's insurance, utilities, and ongoing maintenance.

On the flip side, renting isn’t without additional costs. Renters often pay for things like renters' insurance, parking fees, and utilities. While crunching the numbers may seem tedious, the outcome could be surprisingly exciting, especially with the market shifting in favor of buyers.

So, grab a calculator and chat with your agent. You might discover that buying a home is more affordable than you thought just a few months ago.

As Zillow’s Senior Economist, Orphe Divounguy, explains:

“… for those who can make it work, homeownership may come with lower monthly costs and the ability to build long-term wealth in the form of home equity — something you lose out on as a renter. With mortgage rates dropping, it's a great time to see how your affordability has changed and if it makes more sense to buy than rent.”

Whether you’re in one of these 22 cities or elsewhere, this is the perfect time to reach out to a local agent to explore your options.

With mortgage rates coming down and more homes available, the window of opportunity is wide open. Act fast before others jump back into the market.

Bottom Line

If you’re ready to stop renting and want to find out if buying a home in your area is now within reach, let’s do the math together. We’ll figure out if homeownership makes sense for you now or in the near future.