High home prices have driven many prospective borrowers to rent, but escalating monthly rates have evened the playing field in some of the nation’s larger metros.
Today it’s cheaper to rent in 45 of the nation’s 50 largest housing markets, a ratio that has grown significantly since the end of 2021, according to Realtor.com. Mortgage rates, which nearly doubled in the past year, and home prices fading from a record-high in June caused homeownership costs to grow 37.4% in 2022, more than 10 times faster than rent growth over the same period. The typical monthly starter home payment in December was almost $800 higher than the median rental price of $1,712, the real estate firm found.
Those who want to own property can find competitive homeownership opportunities in five Rust Belt markets. The locales offer average mortgage payments below the national average of nearly $2,000, and in some cases, under $1,000 a month.
“If you’re a renter trying to decide if it’s better to sign another lease or buy a home this year, market conditions are one factor to consider, but it’s far more important to think about what you want and need from a home,” said Danielle Hale, chief economist at Realtor.com. “How much flexibility or stability do you see fitting with your lifestyle over the next five to seven years?”
Realtor.com ranked the top 50 metros by comparing the monthly cost for a starter home, ranging from a median-priced studio to a two-bedroom listing, to the median rental price for a similarly-sized property. Home costs were projected at a 7% mortgage rate and included property taxes, insurance and homeowners association fees.
