Currently Reading

Starter Homes Are More Affordable Than Renting (in Some Places)

Advertisement
Affordability

Starter Homes Are More Affordable Than Renting (in Some Places)

Rents are soaring to all-time highs and rising at a record pace which, after doing the math, has made buying a starter home more affordable than renting in 24 of the 50 largest metro markets, analyzed by Realtor.com


September 23, 2021
Home starter button
Image: stock. Adobe.com

Rents are soaring to all-time highs and rising at a record pace which, after doing the math, has made buying a starter home more affordable than renting in 24 of the 50 largest metro markets, analyzed by Realtor.com

Birmingham, AL tops the list of markets that favor buying, where the monthly cost of buying a “starter” home was $728 in July, which was 33.1% less than the monthly rent of $1,089, for a monthly savings of $361. St. Louis, MO; Pittsburgh, PA; Orlando, FL; and Cleveland, OH metro areas round out the top five markets where the cost of buying was lower than the monthly rent. 

In the top 10 metros that favored buying over renting in July, monthly payments for starter homes were 24.3% lower than rents, driven in part by lower median listing prices ($192,000) than the national rate ($297,000). The types of starter homes for sale also play a key role in monthly payments, with active inventory in these buyer-friendly metros including nearly two times the share of single-family starter homes (56.1%) than in condo-heavy markets that favor renting. 

In tech cities, where real estate comes at a very high premium, renting costs less than a monthly mortgage payment for buyers. Austin, TX; San Jose, CA; Seattle, WA; San Francisco, CA; Los Angeles, CA; and Boston, MA all top the list of housing markets that favor renting. Typically some of the nation’s most expensive housing markets, big tech hubs largely favored renting over buying a starter home in July, partly attributed to higher condo HOA fees.

For charts that break down the top markets that favor buying over renting and vice versa ...

Read More

Related Stories

Housing Markets

Midsize Cities Are Becoming Hot Housing Markets

How cities like Manchester, New Hampshire are pulling in more homebuyers.

Multifamily

Rent Burden Is Greater for Minority Households

Even in the most affordable cities where the rent burden is low, some groups of renters are paying relatively more for housing

Affordability

Home Ownership Still Elusive Even with Low Interest Rates

The issue is particularly acute for first-time homebuyers, who typically have less capital than other buyers.

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.