The top markets with the largest savings for
renters include: Austin, Texas
(121.3% savings), San Francisco
(97.0% savings) and Seattle (86.1%
savings)
SANTA
CLARA, Calif., Jan. 26,
2023 /PRNewswire/ -- For many Americans hoping to
make the transition to first-time buying in 2023, renting will
likely offer relatively more affordable options in the months
ahead, according to the Realtor.com® Monthly Rental
Report released today. On average across the 50 largest U.S. metros
in December, a typical renter faced a 41.4% ($792) lower monthly payment than a starter
homeowner.1
The markets with the largest monthly savings for renters, ranked
by the percent difference between monthly mortgage payments and
asking rents, include:
- Austin, Texas (121.3% or
$2,013)
- San Francisco, Calif. (97.0%
or $2,855)
- Seattle, Wash. (86.1% or
$1,772)
- San Jose, Calif. (83.0% or
$2,621)
- San Diego, Calif. (77.2% or
$2,085)
- Los Angeles, Calif. (74.9% or
$2,150)
- Boston, Mass. (73.1% or
$2,097)
- Portland, Ore. (71.2% or
$1,246)
- Phoenix, Ariz. (70.1% or
$1,116)
- Sacramento, Calif (67.7% or
$1,241)
"Despite the fact that renting will likely be cheaper than
buying in 2023, rental affordability will remain a key issue
throughout the year. We expect rents will keep hitting new highs,
driven by factors including still-low vacancy rates, lagging new
construction and demand from would-be first-time buyers," said
Realtor.com® Chief Economist Danielle Hale. "For prospective first-time
buyers, the key consideration when figuring out whether to buy or
rent is how long you plan to live in your next home. If you're
looking for flexibility to move in the shorter term, renting may be
your best bet, and still offer opportunities to save if you're able
to compromise on factors like proximity to the downtown area.
Whereas buying could be the better option if you're planning to
stay put for at least five years. Market conditions will play a
role, but ultimately the timing comes down to your personal
situation, and tools like the Realtor.com® Rent vs. Buy
Calculator can help you organize and make sense of the many
considerations."
In December, renters faced lower monthly costs than first-time
buyers, on average across the 50 largest U.S. metros and in the
vast majority (45) of these markets. Additionally, the gap between
the cost of renting and buying a similar-sized home widened
significantly compared to December
2021. While this was partly attributed to the slowdown in
rent growth seen over the past year, December trends indicate that
the increase in relative rental affordability was primarily driven
by skyrocketing mortgage rates.
- In December, the U.S. median rental price, $1,712, was $792
lower than a typical monthly starter home payment. Just 12 months
ago, the difference was -$174.
- The widening gap between rents and first-time buying costs is
largely attributed to higher starter homeownership monthly costs
($2,504), which grew 37.4%
year-over-year in December – more than 10 times faster than rents
(+3.2%) during the same period. Furthermore, despite the slowdown
in year-over-year rent growth seen in recent months, typical asking
rents ended the year up an average of 11.6% year-over-year.
- Renting was more affordable than first-time buying in 45 of the
50 largest markets in December, up from 30 markets at the same time
last year. In the top 10 metros that favored renting over
first-time buying (see table below), monthly starter homeownership
costs were an average of 82.2% (+$1,920) higher than rents.
- Just five markets favored starter homeownership over renting in
December, in terms of offering lower monthly costs; these were:
Memphis, Tenn. (-32.7%),
Pittsburgh (-24.1%), Birmingham, Ala. (-23.5%), St. Louis, Mo. (-6.9%) and Baltimore, Md. (-3.7%).
December & Full-Year 2022 Rental Metrics – National
Unit
Size
|
Dec. 2022
Median Rent
|
Dec. 2022 Median
Rent,
YY Change
|
Full-Year 2022 Avg.
YY
Rent Change
|
Overall
|
$1,712
|
3.2 %
|
11.6 %
|
Studio
|
$1,448
|
4.7 %
|
13.2 %
|
1-bed
|
$1,589
|
2.9 %
|
11.3 %
|
2-bed
|
$1,874
|
2.4 %
|
10.9 %
|
December & Full-Year 2022 Rental Metrics – 50 Largest U.S.
Metro Areas
Ranked by % difference between rents and monthly starter home
payments
Rank
|
Metro
Area
|
December
2022
|
Full-
Year
2022
Avg.
|
Buy-Rent
Difference
(%)
|
Buy-Rent
Difference
($)
|
Overall
Median
Rent (0-2
beds)
|
Overall
Rent
YY
|
Monthly
Starter
Home
Cost
|
Monthly
Starter
Home
Cost YY
|
Overall
Rent YY
|
1
|
Austin-Round Rock,
Texas
|
121.3 %
|
$2,013
|
$1,659
|
-0.7 %
|
$3,672
|
31.1 %
|
9.2 %
|
2
|
San
Francisco-Oakland-Hayward, Calif.
|
97.0 %
|
$2,855
|
$2,943
|
3.4 %
|
$5,798
|
34.7 %
|
9.3 %
|
3
|
Seattle-Tacoma-Bellevue, Wash.
|
86.1 %
|
$1,772
|
$2,059
|
1.2 %
|
$3,831
|
57.3 %
|
11.0 %
|
4
|
San
Jose-Sunnyvale-Santa Clara, Calif.
|
83.0 %
|
$2,621
|
$3,156
|
5.9 %
|
$5,777
|
39.6 %
|
13.7 %
|
5
|
San Diego-Carlsbad,
Calif.
|
77.2 %
|
$2,085
|
$2,702
|
1.2 %
|
$4,787
|
51.3 %
|
15.7 %
|
6
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
74.9 %
|
$2,150
|
$2,870
|
2.3 %
|
$5,020
|
37.7 %
|
13.0 %
|
7
|
Boston-Cambridge-Newton, Mass.-N.H.
|
73.1 %
|
$2,097
|
$2,868
|
6.4 %
|
$4,965
|
32.8 %
|
19.8 %
|
8
|
Portland-Vancouver-Hillsboro, Ore.-Wash.
|
71.2 %
|
$1,246
|
$1,750
|
4.7 %
|
$2,996
|
34.8 %
|
9.1 %
|
9
|
Phoenix-Mesa-Scottsdale, Ariz.
|
70.1 %
|
$1,116
|
$1,592
|
-3.3 %
|
$2,708
|
36.6 %
|
10.4 %
|
10
|
Sacramento–Roseville–Arden-Arcade, Calif.
|
67.7 %
|
$1,241
|
$1,834
|
-4.2 %
|
$3,075
|
32.9 %
|
5.2 %
|
11
|
Rochester,
N.Y.
|
66.4 %
|
$887
|
$1,335
|
4.5 %
|
$2,222
|
41.7 %
|
8.7 %
|
12
|
Milwaukee-Waukesha-West
Allis, Wisc.
|
66.1 %
|
$1,024
|
$1,549
|
6.7 %
|
$2,573
|
71.5 %
|
8.6 %
|
13
|
Denver-Aurora-Lakewood,
Colo.
|
63.5 %
|
$1,207
|
$1,902
|
0.8 %
|
$3,109
|
27.2 %
|
9.0 %
|
14
|
Houston-The
Woodlands-Sugar Land, Texas
|
62.4 %
|
$853
|
$1,368
|
1.7 %
|
$2,221
|
31.7 %
|
8.7 %
|
15
|
Dallas-Fort
Worth-Arlington, Texas
|
57.2 %
|
$895
|
$1,564
|
3.4 %
|
$2,459
|
27.1 %
|
14.1 %
|
16
|
Nashville-Davidson–Murfreesboro–Franklin,
Tenn.
|
57.0 %
|
$913
|
$1,602
|
2.5 %
|
$2,515
|
32.0 %
|
14.3 %
|
17
|
New York-Newark-Jersey
City, N.Y.-N.J.-Penn.
|
57.0 %
|
$1,537
|
$2,698
|
12.2 %
|
$4,235
|
10.2 %
|
15.4 %
|
18
|
Columbus,
Ohio
|
55.3 %
|
$684
|
$1,237
|
5.4 %
|
$1,921
|
34.4 %
|
9.4 %
|
19
|
Las
Vegas-Henderson-Paradise, Nev.
|
54.6 %
|
$817
|
$1,495
|
-4.5 %
|
$2,312
|
34.0 %
|
11.9 %
|
20
|
San Antonio-New
Braunfels, Texas
|
53.4 %
|
$691
|
$1,294
|
3.6 %
|
$1,985
|
41.1 %
|
13.7 %
|
21
|
New Orleans-Metairie,
La.
|
52.2 %
|
$739
|
$1,417
|
-0.7 %
|
$2,156
|
11.7 %
|
7.7 %
|
22
|
Minneapolis-St.
Paul-Bloomington, Minn.-Wisc.
|
50.8 %
|
$776
|
$1,527
|
2.5 %
|
$2,303
|
37.9 %
|
3.8 %
|
23
|
Washington-Arlington-Alexandria, DC-Va.-Md.-W.
Va.
|
50.7 %
|
$1,066
|
$2,103
|
3.7 %
|
$3,169
|
35.0 %
|
9.3 %
|
24
|
Riverside-San
Bernardino-Ontario, Calif.
|
45.5 %
|
$927
|
$2,037
|
-6.0 %
|
$2,964
|
50.7 %
|
6.0 %
|
25
|
Jacksonville,
Fla.
|
44.4 %
|
$657
|
$1,479
|
1.6 %
|
$2,136
|
60.8 %
|
13.3 %
|
26
|
Raleigh,
N.C.
|
42.0 %
|
$646
|
$1,537
|
2.3 %
|
$2,183
|
29.6 %
|
14.0 %
|
27
|
Cincinnati,
Ohio-Ky.-Ind.
|
37.4 %
|
$473
|
$1,265
|
7.0 %
|
$1,738
|
42.2 %
|
8.5 %
|
28
|
Providence-Warwick,
R.I.-Mass.
|
37.3 %
|
$771
|
$2,067
|
6.7 %
|
$2,838
|
39.2 %
|
17.3 %
|
29
|
Buffalo-Cheektowaga-Niagara Falls, N.Y.
|
37.2 %
|
$442
|
$1,188
|
2.3 %
|
$1,630
|
25.5 %
|
6.7 %
|
30
|
Richmond,
Va.
|
35.6 %
|
$487
|
$1,368
|
6.2 %
|
$1,855
|
38.3 %
|
12.1 %
|
31
|
Atlanta-Sandy
Springs-Roswell, Ga.
|
34.0 %
|
$567
|
$1,669
|
-1.7 %
|
$2,236
|
35.6 %
|
14.9 %
|
32
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
32.2 %
|
$567
|
$1,760
|
-4.3 %
|
$2,327
|
50.7 %
|
14.4 %
|
33
|
Miami-Fort
Lauderdale-West Palm Beach, Fla.
|
31.5 %
|
$846
|
$2,682
|
4.7 %
|
$3,528
|
40.3 %
|
29.9 %
|
34
|
Philadelphia-Camden-Wilmington,
Penn.-N.J.-Del.-M.D.
|
27.4 %
|
$465
|
$1,697
|
0.4 %
|
$2,162
|
36.5 %
|
6.8 %
|
35
|
Oklahoma City,
Okla.
|
25.8 %
|
$245
|
$950
|
9.6 %
|
$1,195
|
25.8 %
|
11.2 %
|
36
|
Hartford-West
Hartford-East Hartford, Conn.
|
24.3 %
|
$421
|
$1,730
|
7.5 %
|
$2,151
|
37.8 %
|
10.2 %
|
37
|
Louisville/Jefferson
County, Ky.-Ind.
|
22.8 %
|
$250
|
$1,097
|
4.3 %
|
$1,347
|
46.9 %
|
10.4 %
|
38
|
Charlotte-Concord-Gastonia, N.C.-S.C.
|
21.5 %
|
$343
|
$1,592
|
2.3 %
|
$1,935
|
45.9 %
|
12.9 %
|
39
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wisc.
|
18.2 %
|
$359
|
$1,968
|
17.5 %
|
$2,327
|
33.7 %
|
16.5 %
|
40
|
Virginia
Beach-Norfolk-Newport News, Va.-N.C.
|
15.2 %
|
$218
|
$1,432
|
2.4 %
|
$1,650
|
49.6 %
|
9.0 %
|
41
|
Detroit-Warren-Dearborn, Mich.
|
13.5 %
|
$166
|
$1,227
|
5.8 %
|
$1,393
|
30.4 %
|
6.7 %
|
42
|
Cleveland-Elyria,
Ohio
|
13.1 %
|
$151
|
$1,152
|
5.0 %
|
$1,303
|
32.8 %
|
8.2 %
|
43
|
Orlando-Kissimmee-Sanford, Fla.
|
11.7 %
|
$212
|
$1,812
|
4.0 %
|
$2,024
|
53.8 %
|
20.5 %
|
44
|
Kansas City,
Mo.-Kan.
|
10.9 %
|
$140
|
$1,288
|
8.0 %
|
$1,428
|
39.2 %
|
10.5 %
|
45
|
Indianapolis-Carmel-Anderson, Ind.
|
9.9 %
|
$125
|
$1,269
|
9.4 %
|
$1,394
|
44.0 %
|
10.2 %
|
46
|
Baltimore-Columbia-Towson, Md.
|
-3.7 %
|
-$65
|
$1,749
|
2.6 %
|
$1,684
|
25.4 %
|
8.4 %
|
47
|
St. Louis,
Mo.-Ill.
|
-6.9 %
|
-$83
|
$1,211
|
2.7 %
|
$1,128
|
34.1 %
|
7.1 %
|
48
|
Birmingham-Hoover,
Ala.
|
-23.5 %
|
-$270
|
$1,149
|
3.6 %
|
$879
|
19.1 %
|
7.8 %
|
49
|
Pittsburgh,
Penn.
|
-24.1 %
|
-$348
|
$1,445
|
4.5 %
|
$1,097
|
21.2 %
|
7.2 %
|
50
|
Memphis,
Tenn.-Miss.-Ark.
|
-32.7 %
|
-$411
|
$1,258
|
0.3 %
|
$847
|
58.3 %
|
12.4 %
|
Methodology
Rental data as of December 2022 for units advertised as for-rent on
Realtor.com®. Rental units include apartment communities
as well as private rentals (condos, townhomes, single-family
homes). All units were studio, 1-bedroom, or 2-bedroom units.
National rents were calculated by averaging the medians of the 50
largest U.S. metropolitan areas, as defined by the Office of
Management and Budget (OMB). Realtor.com® began
publishing regular monthly rental trends reports in October 2020 with data history going back to
March 2019.
The monthly cost of buying a starter home, also referred to in
this release as first-time buying, was calculated by averaging the
December median listing prices of studio, 1-bed, and 2-bed
homes, weighted by the number of listings, in each housing market
(average across the 50 largest U.S. metros: $318,697). Monthly buying costs assume a 7% down
payment, with a mortgage rate of 6.36%, and include taxes,
insurance and HOA fees.
About
Realtor.com®
Realtor.com® is an
open real estate marketplace built for everyone.
Realtor.com® pioneered the world of digital real
estate more than 25 years ago. Today, through its website and
mobile apps, Realtor.com® is a trusted guide for
consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
and creating confidence through expert insights and guidance. For
professionals, Realtor.com® is a trusted partner
for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq: NWS,
NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information,
visit Realtor.com®.
Media Contact
press@realtor.com
1 See methodology for rent vs. buy calculation
details.
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