Realtor.com® July Rental Report: Renting Still Beats Buying in All of the Largest U.S. Metros
Rhea-AI Summary
Realtor.com®'s July Rental Report reveals that renting remains more affordable than buying in all 50 largest U.S. metros, a trend continuing since February. Elevated mortgage rates and high home prices contribute to over $1,000 in monthly savings by renting. The top metros with the highest rent-to-buy savings are Austin, TX, Seattle, WA, and Los Angeles, CA, with monthly savings of $2,120, $2,222, and $2,784, respectively. Despite overall rent declines for 12 consecutive months, the advantage of renting over buying is shrinking in some areas due to increasing affordable inventory. The report highlights that the monthly cost of buying a starter home is 61.3% higher than renting. However, this trend may change as affordable inventory continues to increase, easing the financial burden on first-time homebuyers.
Positive
- None.
Negative
- The renting advantage has shrunk in 23 of the top 50 markets, reducing rental savings.
- San Francisco, San Jose, Denver, Washington, and Miami saw the largest decrease in rent advantages, with reductions ranging from $563 to $273.
News Market Reaction
On the day this news was published, NWS gained 0.67%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Top Three Metros Where Renting Beats Out Buying Include Austin-Round Rock-
"For every major
Additionally, this July marks the twelfth year-over-year rent decline in a row for 0–2-bedroom properties.
The top 10 metros with the largest rent versus buy savings (see below for top 50 metros):
Austin -Round Rock -Georgetown, Texas –buying cost144.4% more than renting ($2,120 Seattle -Tacoma -Bellevue, Wash. –107.7% ($2,222 Los Angeles-Long Beach -Anaheim, Calif. –99.5% ($2,784 Nashville -Davidson -Murfreesboro -Franklin, Tenn. –93.3% ($1,399 Phoenix -Mesa -Chandler, Ariz. –91.6% ($1,396 Columbus, Ohio –91.3% ($1,090 Dallas- Fort Worth -Arlington, Texas –88.3% ($1,307 San Francisco -Oakland -Berkeley, Calif. –88.2% ($2,442 New York -New Jersey -Jersey City , N.Y., N.J., Pa. –81.1% ($2,342 Boston -Cambridge -Newton, Mass. –78.6% ($2,336
Renting a starter home continues to be a more affordable option in all 50 metros
A common question potential first-time homebuyers face is whether it makes sense to continue renting or if it's time to make a home purchase, and one of the top considerations is the financial costs and benefits of renting versus owning. In July 2024, the cost of buying a starter home in the top 50 metros was
Change on the Horizon? The Advantage of Renting Shrank in Many Metros
Compared to last year, the advantage of renting shrank by 2 percentage points propelled by a greater influx of smaller and more affordable homes for sale leading to a slight decline in listing prices for starter homes. Last July, the average monthly cost of buying a starter home in the top 50 metros was
Over the past year 23 of the top 50 markets saw a diminishing rent advantage over the past 12 months and this advantage shrank the most in
However, not every metro saw a diminishing advantage in renting. In fact
Top metros with diminishing advantage in renting (Dollar amount difference from July 2023 to July 2024)
San Francisco -Oakland -Berkeley, Calif. – -$563 San Jose -Sunnyvale -Santa Clara, Calif. – -$468 Denver -Aurora -Lakewood, Colo. – -$314 Washington -Arlington -Alexandria , D.C.-Va.-Md.-W.Va – -$282 Miami -Fort Lauderdale -Pompano Beach, Fla. – -$273
Top metros with increasing advantage in renting (Dollar amount difference from July 2023 to July 2024)
Memphis, Tenn. -Miss.-Ark. –$246 Birmingham -Hoover, Ala. –$209 New York -New Jersey -Jersey City , N.Y., N.J., Pa –$173 Los Angeles-Long Beach -Anaheim, Calif. –$156 Richmond - Va. –$130
Realtor.com®'s rent versus buy calculator can help consumers determine if the cost of homeownership is a better deal than renting based on their location and budget.
Unit Size | Median Rent | Rent YoY | Rent Change – 5 years (July 2019) |
Overall | -0.7 % | 19.8 % | |
Studio | -0.9 % | 15.1 % | |
1-bed | -1.4 % | 17.7 % | |
2-bed | -0.6 % | 21.7 % |
Rental Data – 50 Largest Metropolitan Areas – July 2024
Metro | Median Rent | Monthly Buy | $Difference | % Difference | Rent Cost: | Buy Cost: |
57.5 % | -6.1 % | -2.3 % | ||||
144.4 % | -10.2 % | -10.7 % | ||||
18.2 % | -2.5 % | 3.1 % | ||||
8.0 % | 0.5 % | 18.0 % | ||||
78.6 % | -2.5 % | -2.9 % | ||||
70.2 % | 16.0 % | 0.4 % | ||||
46.8 % | -6.1 % | -2.8 % | ||||
47.9 % | 0.2 % | 0.0 % | ||||
43.8 % | 2.9 % | -4.9 % | ||||
46.0 % | 0.1 % | 6.6 % | ||||
91.3 % | -1.9 % | -0.2 % | ||||
88.3 % | -4.1 % | -5.9 % | ||||
66.3 % | -1.5 % | -9.7 % | ||||
31.1 % | 2.2 % | 8.7 % | ||||
36.9 % | 8.0 % | 15.4 % | ||||
74.2 % | -2.2 % | -4.6 % | ||||
39.1 % | 1.1 % | 0.4 % | ||||
61.8 % | -5.0 % | -2.4 % | ||||
31.5 % | 1.2 % | 1.6 % | ||||
57.7 % | -3.9 % | 0.5 % | ||||
99.5 % | -1.8 % | 1.9 % | ||||
37.0 % | -2.8 % | 3.6 % | ||||
17.1 % | -3.9 % | 15.8 % | ||||
34.1 % | -3.5 % | -10.1 % | ||||
37.0 % | 3.5 % | 1.3 % | ||||
60.4 % | 4.4 % | -6.2 % | ||||
93.3 % | -10.1 % | -1.8 % | ||||
91.9 % | -4.0 % | 0.8 % | ||||
81.1 % | 0.4 % | 3.6 % | ||||
57.2 % | -0.4 % | -13.1 % | ||||
32.2 % | -4.8 % | -3.0 % | ||||
38.1 % | -0.4 % | 3.1 % | ||||
91.6 % | -5.6 % | -1.4 % | ||||
0.5 % | 2.7 % | 4.3 % | ||||
77.7 % | 3.9 % | -4.6 % | ||||
54.8 % | 5.3 % | 7.5 % | ||||
71.0 % | -3.6 % | 0.3 % | ||||
64.3 % | -2.8 % | 3.6 % | ||||
49.7 % | 0.2 % | 1.9 % | ||||
110.8 % | 7.9 % | 4.0 % | ||||
78.1 % | 8.3 % | -2.1 % | ||||
65.2 % | -7.8 % | -11.9 % | ||||
73.0 % | -1.3 % | -4.4 % | ||||
88.2 % | -5.4 % | -12.1 % | ||||
77.1 % | 4.1 % | -5.3 % | ||||
107.7 % | 0.6 % | -5.4 % | ||||
16.7 % | -0.4 % | 7.9 % | ||||
46.8 % | -2.2 % | -5.8 % | ||||
24.6 % | 4.4 % | -3.5 % | ||||
43.5 % | 0.4 % | -7.7 % |
Methodology
Rental data as of July 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
The monthly cost of buying a home was calculated by averaging the median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market. Monthly buying costs assume a
With the release of its July 2024 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since July 2024 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
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: Mallory Micetich, press@realtor.com
View original content:https://www.prnewswire.com/news-releases/realtorcom-july-rental-report-renting-still-beats-buying-in-all-of-the-largest-us-metros-302222800.html
SOURCE Realtor.com
FAQ
Why is renting more affordable than buying in all major U.S. metros in July 2024?
Which metros offer the highest savings by renting over buying?
How has the renting advantage changed in the past year?
What is the national median rent for different unit sizes in July 2024?
Which metros saw the most significant decrease in rental advantage?
