Is renting cheaper than buying?

Is renting cheaper than buying? For most of the country, the answer is yes. Among US cities with 50,000 people or more, 580 of 813 cost less to rent over 7 years, or 71%. Buying wins in 176 cities. For 57, the difference is too small to call. A typical US home has a median rent of $1,413 each month, compared with about $2,950 monthly for ownership, money that never returns to you.

Does renting really cost less than buying?

When compared each month, renting costs less almost every time. Renting a starter home cost less than buying one in all 50 of the largest metros, according to Realtor.com's July 2026 report. Each month, the average gap was $858.

Realtor.com says this monthly view leaves out two things. The method ignores two factors: what cash paid up front could earn and the home equity owners build. We include both. It also allows the home's value to increase, which changes the result in some cities.

Across nearly every city we track, rent is the smaller bill in year 1. Even so, buying costs less over seven years in 176 of them. Home prices are low compared with rents in those cities, so rising value exceeds the added cost.

Where is renting cheaper than buying, and by how much?

Homes cost far more than rents in the places with the widest gaps. Most of the top places are on the California coast, including Newport Beach and Palo Alto.

Data: Zillow Home Value and Observed Rent indexes. Our rent vs buy method produced the verdicts with a 20% down payment and a 7-year period.

The price-to-rent ratio identifies these places quickly. This ratio divides the typical home price by one year of rent. Our city figures have a median of 18.5. Using Zillow's data, we found that renting won in 288 of 288 tested cities with ratios above 21.

Where can you buy for less than renting?

Buying costs less where home prices are low compared with rents. Older industrial cities such as Detroit and Camden join many Florida cities on this list.

Data: Zillow Home Value and Observed Rent indexes. Our rent vs buy method produced the verdicts with a 20% down payment and a 7-year period.

A low ratio is a good sign, though it doesn't guarantee a result. When the ratio was below 15, our test of the same Zillow data found buying winning in 109 of 188 cities. Renting won in the remaining 79 cities, or their results were too close to call.

Why is renting cheaper than buying right now?

Home prices grew faster than rents. According to the Dallas Fed, the US price-to-rent ratio has increased 20 percent since early 2020 and now sits near its 2006 high.

Loans also cost more. Freddie Mac reports a 7.24% fixed rate for 30 years, up from 6.17% a year earlier. In the Census one-year survey, homeowners with mortgages paid a median $2,035 each month in 2024, compared with median gross rent of $1,487. A new loan at today's rate begins at an even higher amount, as detailed in our rent vs mortgage analysis.

Is renting or owning cheaper for you?

Your city is only the starting point. Three things decide it:

• Your length of stay. Buying takes 3.5% to enter the market and 6% to leave it. The median break-even is year 10 where owning catches up. Owning never catches up within 30 years in 134 cities.
• Whether rent continues to rise. Rent has increased about 3.5% each year since 2006, but a fixed payment remains unchanged.
• Whether you invest money you don't spend. A renter gains from the down payment and monthly difference, which grow at 8.3% a year.

Use rent vs buy by city to look up your city's stamp, then enter different numbers in the rent vs buy calculator. You can use the 5% rule as a one-line shortcut. It agrees with the complete count in 67% of cities.