Renting Is Still Cheaper Than Buying in Most Metros, but the Affordability Gap Is Shrinking

Renters are still saving more than homeowners when it comes to monthly housing costs, but in some metro areas, the gap between rental prices and mortgage payments is shrinking

For the past two years, renting a home has been cheaper than paying a mortgage in most U.S. metro areas, but according to The New York Times, the gap between median gross rent and median costs for homes with a mortgage is shrinking. In 2021, the discrepancy between rental costs and mortgage payments in the nation’s 50 largest metro areas was $564 a month compared to a $593 gap in 2019, according to a recent study by LendingTree.

In metro areas with the priciest homes like San Jose, Calif., New York, and San Francisco, homeowners pay up to $1,262 more per month than renters, while the smallest gaps are in markets like Orlando, Fla., Phoenix, and Jacksonville, Fla., averaging just $252.

According to a recent study by LendingTree, in 2021, the difference between median gross rent and median costs for homes with a mortgage in the nation’s 50 largest metro areas was $564 a month.

That’s a nice chunk of savings for renters over the course of a year. Unfortunately, it wasn’t as much as in 2019, when renters paid an average of $593 less each month than homeowners with mortgages. The narrowing gap is explained in part by the falling mortgage rates of that time, which reduced monthly costs for many owners. 

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