US Only Has 4 Metros Where Buying a Home is Cheaper Than Renting: Redfin
Originally published on May 19, 2023, by Ally Braun for RedFin.
here are just four major U.S. metropolitan areas where it would be cheaper to buy than rent the typical home—that is, the typical home has an estimated monthly mortgage cost lower than its estimated monthly rental cost. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
In Detroit, the typical home is 24% less expensive to buy than rent—the largest discount in percentage terms among the 50 most populous metros. The median estimated monthly mortgage payment for Detroit homebuyers is $1,296, compared with an estimated monthly rent of $1,697. Next comes Philadelphia (7% ownership discount), followed by Cleveland (4% discount) and Houston (1% discount).
On average, in the 50 most populous U.S. metros, the typical home costs 25% more to buy than rent, with an estimated monthly mortgage payment of $3,385 and an estimated rent of $2,715. Redfin estimated monthly housing payments using the Redfin Estimate of the homes’ value in March and a 6.5% mortgage interest rate—the average rate in March. We estimated monthly rents on those same homes using the Redfin Rental Estimate.