Key takeaways
- On average, renting a home is cheaper than paying a mortgage in all 50 of the largest U.S. metros in 2025 — with the cost difference between the two growing in 38 metros since last year.
- Nationally, an average mortgage payment costs 38 percent more per month compared to average rent.
- The metros with the smallest price gaps between renting and buying are mostly concentrated in the Rust Belt, including Detroit, Philadelphia and Cleveland.
- The biggest cost gaps between renting and buying are centered in the tech hubs of San Francisco, San Jose and Seattle.
Paul Leara, a 31-year-old mortgage broker based in Birmingham, Alabama, may help people secure mortgages every day, but he has been a loyal renter for the last decade.
Leara likes that renting allows for more flexibility and has lower upfront costs. Without a down payment or closing costs, he has been able to keep more of his cash on hand and invest what he would’ve put toward a house in the stock market. He said another perk is that he’s off the hook for any maintenance or repairs in his apartment.
“I didn’t give into the pressure of everybody else around me saying ‘you got to buy so you can build equity. You’re just throwing your money away with rent,’” Leara said. “I just don’t subscribe to that because I think the numbers prove otherwise.”
Renting has increasingly become a more attractive option for young Americans who have been wrestling with an unaffordable housing market over the last few years.
Average rents are cheaper than average mortgage payments (homeowners insurance and property taxes included) in all 50 of the largest U.S. metros, with the cost difference between the two growing in all but 12 of those metros since last year, according to Bankrate’s 2025 Rent vs. Buy Study.
Over the last year, the study also found average mortgage payments (including principal, interest, homeowners insurance and property taxes) increased while average rents either declined or remained stable in nearly all the metros we analyzed.
Housing experts said the fact that it’s cheaper to rent in all 50 metros is a broader reflection of rental and housing market conditions across the country. High mortgage and home prices, combined with limited housing inventory, have created a high barrier to entry for aspiring homeowners. Rising property taxes and homeowners insurance rates are also straining homeowners’ budgets. At the same time, rents have experienced a slowdown in growth and rental inventory has dramatically increased, giving renters more options to choose from.
There are long-term financial benefits to owning a home, but hopeful buyers entering the market now should plan to make a larger down payment or allocate a larger portion of their monthly budget to their mortgage payment, experts said.
It’s cheaper to rent than to buy in the 50 largest U.S. metros
The rent-versus-buy question is one that millions of Americans are always grappling with. And while the answer varies from household to household, the current housing market continues to tip in favor of renting as the more cost-effective option in the short term.
Bankrate compared average monthly mortgage payments to average monthly rent for all homes across all 50 of the largest metro statistical areas (MSAs) in the United States to determine whether renting or buying is more affordable in the short term. The types of homes compared in the analysis include single-family homes, apartments, multi-family homes and townhouses.
The average monthly mortgage payment for a median-priced home ($425,583, per Redfin) in the United States, including average property taxes and homeowners insurance, rose 2.4% year over year to $2,768 as of February 2025.
In comparison, rents have remained stable year over year. The average national monthly rent came in around $2,000 in February 2025 after accounting for monthly renters insurance and adjusting for inflation, down less than two percentage points since last year. Nationally, an average mortgage payment costs 38 percent more per month compared to average rent.
Your location in the U.S. will heavily influence whether you rent or buy
Big city dwellers are better off renting than buying a home, particularly in pricey coastal metros. Bankrate’s study found that San Francisco, for example, has had the widest gap between average rent and the average mortgage payment over the last two years, followed by San Jose. It costs almost 191 percent more to have a mortgage payment than to rent in San Francisco, according to Bankrate’s latest estimates.
If you’re in the coastal markets, you have to consider this home as a very long-run solution. In California, people famously leave their homes to their children. There are very long tenures in these really expensive markets for that reason.
— Skylar Olsen
Zillow’s chief housing economist
Olsen said hot real estate markets have been trending that way for the last few years, primarily because rising home prices in those markets have significantly outpaced rent growth. While mortgage rates have contributed to the decline in housing affordability, home prices have skyrocketed across the country over the last few years, largely due to an imbalance in the U.S. housing market’s supply and demand.
In most markets across the country, there are more buyers than there are available homes for sale. At the same time, Olsen said the inventory for rental markets has increased dramatically over the past year.
“That’s provided a lot of opportunities for renters,” Olsen said. “The U.S. housing market has delivered more apartments than we have since the seventies. It makes staying in the rental market much more appealing than jumping to the single-family market.”
However, in cheaper areas of the country, it’s a lot easier to justify a home purchase right now, even with mortgage rates above what they were five years ago. While it’s still cheaper in the short term to rent in more affordable metros, the long-term financial benefits of buying are also more obvious in those areas because the differences between renting and buying costs are much smaller. In Detroit, for example, an average mortgage payment — with property taxes and homeowners insurance included — costs roughly 2 percent more than average rent.
Homeowners in those areas may pay more upfront now, but in the long run, they’ll generate equity, hedge themselves against rent increases and otherwise enjoy the intangibles that come with homeownership.
The study did not factor in some of the tangential benefits associated with renting or owning, such as the equity that homeowners are building every month, or the relative freedom renters have to move to different cities and avoid costly home repairs. But each comes with its own set of lifestyle and financial trade-offs that should be considered, experts said.
The thing you have to consider is that rent could definitely go up in the long run, whereas mortgage rates will probably fall in the long run. Eventually, you’ll pay it off and own it outright.
— Daryl Fairweather
Redfin’s chief housing economist
10 metro areas with the biggest gaps between renting and buying
The advantage for renters is even greater in big cities. The West has the biggest differences between renting and buying, with all the top five metros with the biggest gaps being located in the region. These metros tend to have a higher cost of living and elevated home prices.
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- Typical monthly rent: $3,055, down 1.7% YoY
- Typical monthly mortgage payment: $8,882, up 4.7% YoY
- Buy-rent gap: 190.7%
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- Typical monthly rent: $3,305, down 1.3% YoY
- Typical monthly mortgage payment: $9,438, up 10.5% YoY
- Buy-rent gap: 185.6%
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- Typical monthly rent: $2,265, up 0.5% YoY
- Typical monthly mortgage payment: $4,971, up 0.8% YoY
- Buy-rent gap: 119.5%
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- Typical monthly rent: $1,927, down 7.5% YoY
- Typical monthly mortgage payment: $3,787, up 4.4% YoY
- Buy-rent gap: 96.5%
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- Typical monthly rent: $1,680, down 2.4% YoY
- Typical monthly mortgage payment: $3,197, up 1.1% YoY
- Buy-rent gap: 90.4%
Other metros with the biggest cost differences between renting and buying are Los Angeles, CA (88.5 percent); Austin, TX (87.9 percent); Portland, OR (85.6 percent); San Diego, CA (79.9 percent); and Dallas, TX (73.4 percent).
10 metro areas with the smallest gaps between renting and buying
The metros where it makes more sense to buy than rent tend to be concentrated in the Rust Belt, having the smallest differences between mortgage costs and rent. These metros typically have a lower cost of living and more affordable home prices that haven’t been rising as quickly compared to other areas of the country.
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Typical monthly rent: $1,481, up 3.25%
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Typical monthly mortgage payment: $1,515, up 6.4%
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Buy-rent gap: 2.3%
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Typical monthly rent: $1,452, down 0.2%
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Typical monthly mortgage payment: $1,601, up 7.6%
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Buy-rent gap: 10.3%
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Typical monthly rent: $1,901, up 1.1%
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Typical monthly mortgage payment: $2,121, up 6.7%
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Buy-rent gap: 11.5%
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Typical monthly rent: $1,419, up 0.3%
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Typical monthly mortgage payment: $1,607, up 4.6%
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Buy-rent gap: 13.2%
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Typical monthly rent: $2,140, down 1.2%
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Typical monthly mortgage payment: $2,587, down 1.3%
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Buy-rent gap: 20.9%
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The remaining top 10 metros with the smallest gaps between renting and buying are Cincinnati, OH (23.4 percent); Chicago, IL (24.2 percent); Indianapolis, IN (25.4 percent); St. Louis, MO (26.6 percent); and Grand Rapids, MI (29.8 percent).
Is it better to rent or buy in 2025? Advice from 3 housing experts
Date the rate, marry the house
“ I would caution against rushing on this massive financial decision. It’s important to be well-prepared, well-researched and well-supported by housing professionals that you assemble as your team. You are trying to find a great match in your home over the years to come. No rushing. You’re trying to achieve homeownership.”
Skylar Olsen, Zillow chief economist
Consider how long you plan to live in the area
“You should buy when you’re ready to settle down. It’s kind of cliché, but it’s true. If you’re going to stay in the home for more than five years, that’s when you have built up enough equity where it becomes worthwhile. There are high transaction costs to buying and selling homes because of real estate fees and taxes, so you want to make sure you’re ready to stay there for the long haul.”
Daryl Fairweather, Redfin chief economist
Ask yourself if you’re prepared for a long-term investment
“Households working on their budget will find it much easier to continue to rent than to go through the expenses of homeownership. However, they need to consider the equity and generational wealth they can build up by owning a home that they can’t by renting it. In the long run, buying a home may be a better investment even if the short-run costs seem prohibitive. We’re starting to see buying conditions improve, which will be a good opportunity for those right on the margin of purchasing their first home.”
Joel Berner, Realtor.com senior economist
Average rent vs. average mortgage payment in the 50 largest U.S. metros
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Metros
Average monthly rent
Average monthly mortgage payment
Buy-rent gap
YoY change, Buy-rent gap
Atlanta-Sandy Springs-Alpharetta, GA Metro Area
$1,902
$2,533
33.2%
1.7%
Austin-Round Rock-Georgetown, TX Metro Area
$1,692
$3,181
87.9%
1.4%
Baltimore-Columbia-Towson, MD Metro Area
$1,857
$2,417
30.2%
-2.2%
Birmingham-Hoover, AL Metro Area
$1,402
$1,876
33.8%
5.1%
Boston-Cambridge-Newton, MA-NH Metro Area
$3,132
$4,615
47.4%
4.6%
Charlotte-Concord-Gastonia, NC-SC Metro Area
$1,789
$2,468
38.0%
1.7%
Chicago-Naperville-Elgin, IL-IN-WI Metro Area
$2,098
$2,606
24.2%
1.3%
Cincinnati, OH-KY-IN Metro Area
$1,564
$1,930
23.4%
-0.8%
Cleveland-Elyria, OH Metro Area
$1,419
$1,607
13.2%
1.6%
Columbus, OH Metro Area
$1,512
$2,235
47.9%
-3.2%
Dallas-Fort Worth-Arlington, TX Metro Area
$1,758
$3,049
73.4%
0.9%
Denver-Aurora-Lakewood, CO Metro Area
$1,927
$3,787
96.5%
17.6%
Detroit-Warren-Dearborn, MI Metro Area
$1,481
$1,515
2.3%
0.3%
Fresno, CA Metro Area
$2,015
$2,660
32.0%
1.2%
Grand Rapids-Wyoming-Kentwood, MI Metro Area
$1,640
$2,129
29.8%
-6.2%
Hartford-East Hartford-Middletown, CT Metro Area
$1,880
$2,558
36.0%
2.2%
Houston-The Woodlands-Sugar Land, TX Metro Area
$1,689
$2,474
46.4%
-12.4%
Indianapolis-Carmel-Anderson, IN Metro Area
$1,572
$1,971
25.4%
2.6%
Jacksonville, FL Metro Area
$1,732
$2,493
43.9%
-0.4%
Kansas City, MO-KS Metro Area
$1,508
$2,367
57.0%
2.2%
Las Vegas-Henderson-Paradise, NV Metro Area
$1,784
$2,637
47.8%
-1.1%
Los Angeles-Long Beach-Anaheim, CA Metro Area
$3,005
$5,663
88.5%
2.3%
Louisville/Jefferson County, KY-IN Metro Area
$1,393
$1,869
34.2%
6.6%
Memphis, TN-MS-AR Metro Area
$1,432
$1,901
32.8%
3.6%
Miami-Fort Lauderdale-Pompano Beach, FL Metro Area
$2,721
$4,449
63.5%
8.0%
Milwaukee-Waukesha, WI Metro Area
$1,455
$2,252
54.8%
6.0%
Minneapolis-St. Paul-Bloomington, MN-WI Metro Area
$1,669
$2,638
58.1%
4.3%
Nashville-Davidson–Murfreesboro–Franklin, TN Metro Area
$1,861
$2,824
51.7%
4.5%
New York-Newark-Jersey City, NY-NJ-PA Metro Area
$3,253
$4,963
52.6%
2.9%
Oklahoma City, OK Metro Area
$1,379
$2,073
50.3%
-0.9%
Orlando-Kissimmee-Sanford, FL Metro Area
$2,022
$2,723
34.7%
1.3%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area
$1,901
$2,121
11.5%
2.8%
Phoenix-Mesa-Chandler, AZ Metro Area
$1,830
$2,916
59.3%
8.8%
Pittsburgh, PA Metro Area
$1,452
$1,601
10.3%
5.1%
Portland-Vancouver-Hillsboro, OR-WA Metro Area
$1,846
$3,426
85.6%
0.3%
Providence-Warwick, RI-MA Metro Area
$2,083
$3,211
54.1%
6.5%
Raleigh-Cary, NC Metro Area
$1,743
$2,645
51.8%
3.7%
Richmond, VA Metro Area
$1,663
$2,405
44.6%
2.1%
Riverside-San Bernardino-Ontario, CA Metro Area
$2,585
$3,666
41.8%
1.4%
Sacramento-Roseville-Folsom, CA Metro Area
$2,310
$3,619
56.7%
0.7%
Salt Lake City, UT Metro Area
$1,680
$3,197
90.4%
1.4%
San Antonio-New Braunfels, TX Metro Area
$1,456
$2,123
45.8%
-7.3%
San Diego-Chula Vista-Carlsbad, CA Metro Area
$3,042
$5,472
79.9%
-2.6%
San Francisco-Oakland-Berkeley, CA Metro Area
$3,055
$8,882
190.7%
10.1%
San Jose-Sunnyvale-Santa Clara, CA Metro Area
$3,305
$9,438
185.6%
23.2%
Seattle-Tacoma-Bellevue, WA Metro Area
$2,265
$4,971
119.5%
-5.5%
St. Louis, MO-IL Metro Area
$1,398
$1,770
26.6%
2.9%
Tampa-St. Petersburg-Clearwater, FL Metro Area
$2,140
$2,587
20.9%
-3.6%
United States
$2,000
$2,768
38.4%
1.8%
Virginia Beach-Norfolk-Newport News, VA-NC Metro Area
$1,763
$2,360
33.8%
1.9%
Washington-Arlington-Alexandria, DC-VA-MD-WV Metro Area
$2,386
$3,607
51.2%
0.8%
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Bankrate’s Rent vs. Buy Study analyzed typical monthly mortgage payments and typical monthly rents for all homes in the 50 most populated U.S. metros to compare the monthly cost of buying vs. renting.
Typical monthly rents are measured by Zillow’s Observed Rent Index (ZORI) as of Feb. 29, 2024, which is the average of the middle 30 percent of asking rent prices (35th to 65th percentile) — or what someone in the market for a rental would expect to pay today. ZORI accounts for changes in the types of homes available to rent in any given month by calculating price differences for the same rental unit over time, and then aggregating those differences. For monthly rents, Bankrate factored in the typical monthly cost of renters insurance for every metro. Bankrate used 1 percent of monthly rent as an approximation for the monthly cost of renters insurance.
Bankrate utilized Redfin’s median sale price data from February 2024 to calculate typical monthly mortgage payments for the 50 largest metros. When estimating typical monthly mortgage payments for every metro, Bankrate assumed a 20 percent down payment, no HOA fees or private mortgage insurance (PMI), the average homeowners insurance rate for that metro, the average property taxes for that metro and the national average rate for a 30-year mortgage (7.01%) as of March 27, per Bankrate’s survey of large lenders. Bankrate utilized 2022 average property tax data from ATTOM and average homeowners insurance rates as of April 2024 from Bankrate’s Quadrant Information Services data.
With the exception of property taxes, homeowners insurance and renters insurance, the study doesn’t factor in upfront and ongoing costs associated with renting or buying (closing costs, maintenance costs, rental application fees or security deposit). Home equity built over time, the ability to refinance a mortgage for a lower rate or homeowner tax benefits were also not factored in the study. The quality of rental homes may not match the quality of homes for sale, and seasonality in the housing market may impact the analysis. Results in this study in no way indicate approval or financing of a mortgage.
Read the full article here
