Home US It is now cheaper to rent than buy in ALL of America’s largest 50 metros – with mortgages costing double in most sought-after cities

It is now cheaper to rent than buy in ALL of America’s largest 50 metros – with mortgages costing double in most sought-after cities

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It is now cheaper to rent than buy property in the 50 largest metropolitan areas in the United States, but some cities have greater cost differences than others.

It’s a question most first-time buyers ask: How long should they rent before buying a home?

But recent data from Realtor.com means the answer for Americans across the country could be: never.

It’s now cheaper to rent than buy property in America’s 50 largest metropolitan areas, according to the listing company’s February rental report. report.

While renting was already more affordable than buying in the vast majority of metropolitan areas at this time last year, high mortgage rates and rising home prices have changed the remaining markets.

In February of this year, the average cost of buying a starter home in the top 50 US metropolitan areas was 60.1 percent higher than that of renting one: about $1,027 more in monthly costs. But in some highly sought-after areas, the cost was more than double.

It is now cheaper to rent than buy property in the 50 largest metropolitan areas in the United States, but some cities have greater cost differences than others.

It is now cheaper to rent than buy property in the 50 largest metropolitan areas in the United States, but some cities have greater cost differences than others.

Rents fell across the country in February, Realtor.com found. Overall, the median rent was $1,708 a month, down 0.4 percent from a year ago.

While it was down 2.8 percent (or $50) from the peak seen in August 2022, it was still 17.3 percent (or $252) higher than before the Covid-19 pandemic in February 2022. 2020.

The gap between renting and buying was widest in Austin, Texas, according to Realtor.com.

The monthly cost of buying a starter home in the metro area was $3,695, which was 141.5 percent – or $2,165 – more than the typical monthly rent of $1,530.

To calculate monthly purchase costs, Realtor.com assumed an 8 percent down payment, a 6.78 percent mortgage rate and included the cost of taxes, insurance and fees.

Austin home prices have skyrocketed during the pandemic, as its sunny weather, expansive state parks and relative affordability attracted an influx of buyers.

The Texas city once was seen as the epitome of the popular Sunbelt real estate market, but experts now warn that its housing bubble could be about to burst.

While real estate prices remain high, they have fallen from their peak. Properties in the city typically sell for $525,750, having dropped almost $150,000 from a peak in May 2022, according to separate figures from the real estate company. red fin.

And according to Realtor.com, purchasing costs have also fallen 1.6 percent over the past 12 months. Meanwhile, the monthly rental cost has dropped by 4.44 percent.

Austin's sunny weather, spacious state parks and relative affordability attracted an influx of buyers during the pandemic.

Austin's sunny weather, spacious state parks and relative affordability attracted an influx of buyers during the pandemic.

Austin’s sunny weather, spacious state parks and relative affordability attracted an influx of buyers during the pandemic.

The metro area with the second-largest price difference between renting and buying last month was Seattle.

1711648470 713 It is now cheaper to rent than buy in ALL

1711648470 713 It is now cheaper to rent than buy in ALL

“Rent a home is now a more cost-effective option in every major U.S. market,” said Danielle Hale, chief economist at Realtor.com.

The monthly cost of buying a starter home was $4,422, while the median rent was $2,000, a difference of 121.1 percent.

Meanwhile, in Phoenix, the cost of renting was almost exactly half the cost of purchasing.

While the median rent in the city was $1,543 in February, the typical monthly cost of buying a home was $3,071.

“As rents continue to fall and the cost of buying a home remains high, renting a home is now a more cost-effective option in all major U.S. markets,” Danielle Hale, chief economist at Realtor.com, said in a statement. .

According to the latest data from government-backed lender Freddie Mac, the average 30-year fixed-rate mortgage has risen to 6.87 percent.

High mortgage rates, coupled with high home prices and a historic shortage of properties for sale, have meant prospective homeowners face substantial challenges.

In February of last year, Realtor.com found that renting was the most affordable option in 45 of the largest metropolitan areas in the United States.

But in the 12 months since then, Memphis, Tennessee, Birmingham, Alabama, Pittsburgh, Pennsylvania, St. Louis, Missouri, and Baltimore, Maryland, have moved from pro-buying markets to pro-rental markets.

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