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Deciding whether to rent or buy a home depends on several factors — including finances, long-term goals and local market conditions. While homeownership can be a long-term investment, renting remains the cheaper option in each of the country’s 100 largest metro areas, according to a LendingTree analysis of U.S. Census Bureau data.
The study compared median monthly rents to median homeownership costs — including mortgage payments, taxes and fees — across the 100 largest metros. It found that, without exception, renting was more affordable than owning a home with a mortgage.
“This isn’t just happening in the giant coastal cities. We’re seeing it in Omaha, Wichita, Toledo, Oklahoma City and dozens of other areas from coast to coast,” said Matt Schultz, LendingTree’s chief consumer finance analyst.
“In almost half of the nation’s biggest cities, it is at least $500 cheaper each month to rent than to own. In some cases, that difference is $1,000 or more. That’s real money that can go to other major financial goals like building an emergency fund, investing for retirement, saving for college or even starting a small business.”
Key findings
Nationwide, the median monthly rent in 2023 was $1,406, while the median monthly housing cost for homeowners with a mortgage was $1,904 — a difference of $498. That gap widened from 2022, when the difference was $475.
The largest expense gaps between renting and owning a home were in:
- San Francisco: Median rent of $2,397, compared to $3,811 in homeownership costs, a difference of $1,414
- Bridgeport, Connecticut: Median rent of $1,862, compared to $3,229 in homeownership costs, a difference of $1,367.
- New York City: Median rent of $1,764, compared to homeownership costs of $3,104, a difference of $1,340.
Conversely, the smallest gaps were found in:
- Phoenix: Median rent of $1,760, only $90 less than the $1,850 median for homeowners
- Orlando: Median rent of $1,799, only $127 less than the $1,926 median for homeowners
- Palm Bay, Florida: Median rent of $1,648, only $128 less than the $1,776 median for homeowners
When measured as a percentage, renters in New York, Bridgeport and Providence, Rhode Island, saved the most compared to homeowners. In these cities, rent was between 66% and 76% lower than the median homeownership costs.
Rent or buy?
According to LendingTree, there is no universal answer to whether renting or buying is the better choice. Its experts recommend consumers consider their personal finances, lifestyle needs and long-term plans.
Renting may be the better option if:
- Affording a mortgage is difficult. With mortgage rates hovering near 7% and median home prices above $400,000, buying is costly. Renting may be a better short-term financial choice.
- You lack savings for a down payment. Homeownership requires upfront costs, including a down payment and closing fees, while renting typically requires only a security deposit.
- You plan to move soon. Buying a home is a long-term investment. Renting allows for flexibility if you expect to relocate.
- You prefer fewer maintenance responsibilities. Homeowners must pay for repairs and upkeep, whereas landlords typically handle maintenance for renters.
Buying may be the better option if:
- You want to build equity. Homeowners can accumulate wealth as property values rise, unlike renters who do not gain equity.
- You could benefit from tax deductions. Homeowners may deduct mortgage interest, property taxes and other costs on federal tax returns.
- You want control over your living space. Homeownership allows modifications, renovations and customization that renting often does not.
- You are financially stable. Buying a home requires financial security, as missing mortgage payments can lead to foreclosure.
