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Browse the siteJanuary 31 2023
The top markets with the largest savings for renters include: Austin, Texas (121.3% savings), San Francisco (97.0% savings) and Seattle (86.1% savings)
SANTA CLARA, Calif., Jan. 26, 2023 -- For many Americans hoping to make the transition to first-time buying in 2023, renting will likely offer relatively more affordable options in the months ahead, according to the Realtor.com® Monthly Rental Report released today. On average across the 50 largest U.S. metros in December, a typical renter faced a 41.4% ($792) lower monthly payment than a starter homeowner.
The markets with the largest monthly savings for renters, ranked by the percent difference between monthly mortgage payments and asking rents, include:
"Despite the fact that renting will likely be cheaper than buying in 2023, rental affordability will remain a key issue throughout the year. We expect rents will keep hitting new highs, driven by factors including still-low vacancy rates, lagging new construction and demand from would-be first-time buyers," said Realtor.com® Chief Economist Danielle Hale. "For prospective first-time buyers, the key consideration when figuring out whether to buy or rent is how long you plan to live in your next home. If you're looking for flexibility to move in the shorter term, renting may be your best bet, and still offer opportunities to save if you're able to compromise on factors like proximity to the downtown area. Whereas buying could be the better option if you're planning to stay put for at least five years. Market conditions will play a role, but ultimately the timing comes down to your personal situation, and tools like the Realtor.com® Rent vs. Buy Calculator can help you organize and make sense of the many considerations."
In December, renters faced lower monthly costs than first-time buyers, on average across the 50 largest U.S. metros and in the vast majority (45) of these markets. Additionally, the gap between the cost of renting and buying a similar-sized home widened significantly compared to December 2021. While this was partly attributed to the slowdown in rent growth seen over the past year, December trends indicate that the increase in relative rental affordability was primarily driven by skyrocketing mortgage rates.
Ranked by % difference between rents and monthly starter home payments
Methodology
Rental data as of December 2022 for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. National rents were calculated by averaging the medians of the 50 largest U.S. metropolitan areas, as defined by the Office of Management and Budget (OMB). Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history going back to March 2019.
The monthly cost of buying a starter home, also referred to in this release as first-time buying, was calculated by averaging the December median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market (average across the 50 largest U.S. metros: $318,697). Monthly buying costs assume a 7% down payment, with a mortgage rate of 6.36%, and include taxes, insurance and HOA fees.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.