Renting is now cheaper than owning, data shows: See the list of top markets

LOS ANGELES - For many Americans, homeownership has long been seen as the ultimate financial goal—but in today’s housing market, renting may be the smarter move.

A new analysis from LendingTree shows that in every one of the 100 largest U.S. metro areas, renting is now cheaper than owning a home with a mortgage.

With rising mortgage rates and home prices remaining stubbornly high, the gap between renting and owning has only widened. 

In some cities, the difference is staggering: San Francisco renters save over $1,400 per month compared to homeowners, while in New York, the gap is over $1,300. Even in metros with the smallest difference, like Phoenix and Orlando, renting still comes out ahead.

Where is renting cheaper than owning?

By the numbers:

The cost gap between renting and owning has widened across the country, making homeownership less affordable for many Americans. In some metros, the difference is drastic, with renters saving over $1,000 per month compared to homeowners with a mortgage. Here’s a look at where the financial divide is the largest.

• Nationwide gap: Median rent in the U.S. was $1,406 per month in 2023, compared to $1,904 per month for homes with a mortgage—a $498 monthly difference.
• Biggest gaps:San Francisco, CA: $1,414 per month differenceBridgeport, CT: $1,367 per month differenceNew York, NY: $1,340 per month difference
• San Francisco, CA: $1,414 per month difference
• Bridgeport, CT: $1,367 per month difference
• New York, NY: $1,340 per month difference
• Smallest gaps:Phoenix, AZ: $90 per month differenceOrlando, FL: $127 per month differencePalm Bay, FL: $128 per month difference
• Phoenix, AZ: $90 per month difference
• Orlando, FL: $127 per month difference
• Palm Bay, FL: $128 per month difference

The study also found that renters in New York, Bridgeport, and Providence pay at least 66% less than homeowners with a mortgage in their metro areas.

Why is renting the cheaper option?

The backstory:

The affordability gap between renting and owning has grown due to rising mortgage rates and high home prices. The average 30-year fixed mortgage rate has hovered near 7%, making it harder for buyers to afford monthly payments. Additionally, home prices have remained elevated, with median home values staying above $400,000 in many parts of the country.

A "For Rent" sign stands in front of a home, as new data shows renting is now cheaper than owning in every major U.S. metro.

Renting, on the other hand, offers lower upfront costs, no property taxes, and fewer maintenance expenses—making it the more attractive financial option for many Americans in the short term.

In some cities, the cost of homeownership far exceeds the price of renting, making it a more attractive option for those looking to save money. LendingTree data highlights the metro areas where the gap between renting and owning is the largest. Here’s the full list:

Top 10 metros where renting is cheaper than owning:

1. San Francisco, CA – Rent: $2,397 – Mortgage: $3,811 – Difference: $1,414
2. Bridgeport, CT – Rent: $1,862 – Mortgage: $3,229 – Difference: $1,367
3. New York, NY – Rent: $1,764 – Mortgage: $3,104 – Difference: $1,340
4. San Jose, CA – Rent: $2,773 – Mortgage: $4,000+ – Difference: $1,227
5. Los Angeles, CA – Rent: $1,993 – Mortgage: $3,096 – Difference: $1,103
6. Kiryas Joel, NY – Rent: $1,610 – Mortgage: $2,526 – Difference: $916
7. Honolulu, HI – Rent: $2,033 – Mortgage: $2,933 – Difference: $900
8. Providence, RI – Rent: $1,330 – Mortgage: $2,216 – Difference: $886
9. Worcester, MA – Rent: $1,449 – Mortgage: $2,329 – Difference: $880
10. Seattle, WA – Rent: $1,965 – Mortgage: $2,839 – Difference: $874

The biggest gaps are found in major coastal metros, particularly in California and the Northeast, where high home prices and mortgage rates make renting a more affordable alternative.

How will this impact future housing decisions?

What's next:

With mortgage rates still high and home prices not dropping significantly, experts say renting will likely remain the cheaper option in the near future. However, buying a home can still be a valuable long-term investment, particularly for those planning to stay in one place for many years.

Financial analysts suggest that prospective buyers carefully weigh their options based on their financial stability, long-term goals, and local market conditions before making a decision.