Renting remains the more affordable option in nearly all of the nation’s largest metropolitan areas, according to the latest Realtor.com January Rent Report.
While rent and homeownership costs have declined slightly over the past year, elevated mortgages continue to keep the cost of buying higher than renting in 48 of the 50 largest U.S. metros. This marks a shift from January 2024, when six metros were more affordable for buyers. Now, only Detroit and Pittsburgh offer lower homeownership costs compared to renting.
Economists attribute this trend to persistent affordability challenges in the housing market. Although home prices have softened in some areas, mortgage rates remain high, making monthly payments unaffordable for many prospective buyers.
“This relative cost advantage is one of the reasons we expect an increase in renter households and declines in the homeownership rate in 2025,” said Danielle Hale, chief economist, at Realtor.com.
Detroit and Pittsburgh remain the exceptions, with homeownership costs lower than renting. Both cities have some of the lowest median home prices in the country – $239,950 in Detroit and $229,700 in Pittsburgh. In these metros, steady or rising rents have tipped the balance in favor of buying. However nationwide, rents remain historically high.
Despite a slight dip over the past year, the median rent remains 16.1% higher than pre-pandemic levels in January 2020, now at $1,703. Renters in cities such as New York and Miami continue to spend a significant portion of their income on housing. New Yorkers allocate 37.6% of their earnings to rent, compared to 35.9% in Los Angeles and 26.8% in Orlando.
While affordability remains a challenge across the board, some metros are shifting toward becoming more renter-friendly. In New York, San Jose, and Detroit, both renting and buying now consume a larger share of household income. Meanwhile, Kansas City is becoming more favorable for buyers, with declining home costs relative to income. At the same time, 18 metros – including Baltimore, Boston, Chicago, Los Angeles, and Minneapolis – are becoming more renter-friendly, as the income required to purchase a home has increased.
Even as the housing market cools, homeownership remains out of reach for many Americans. With mortgage rates expected to stay elevated in 2025, renting is likely to remain the more practical financial choice in most major U.S. cities.
