{"id":28050,"date":"2024-03-14T06:00:00","date_gmt":"2024-03-14T10:00:00","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=28050"},"modified":"2024-03-26T13:19:06","modified_gmt":"2024-03-26T17:19:06","slug":"rent-vs-mortgage-costs-usa-2024","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/rent-vs-mortgage-costs-usa-2024\/","title":{"rendered":"Renting vs. Buying in the US: Here\u2019s Where Homeownership Costs Are Comparable to Rent"},"content":{"rendered":"\n

Prospective homebuyers in the US have been eagerly waiting for lower mortgage rates following the sky-high rates experienced last year. The Federal Reserve has held the overnight federal funds rate at 5.33%<\/a> since August, but many economists are predicting rate cuts are coming later this year. In response to slowing inflation, fixed mortgage rates have been on a gradual decline since peaking in November 2023, with some 30-year fixed rates hovering under 7%<\/a>. <\/p>\n\n\n\n

While homeowners have been grappling with higher mortgage payments, renters have likewise been confronting rising rental costs. From January 2020 to January 2024, according to Rent.com<\/a>, the national median asking rent increased by 24% from $1,584 to $1,964. Considering this, many Americans may be questioning whether to enter the resale market or continue renting this year.<\/p>\n\n\n\n

Enjoying our content? Subscribe to our free <\/em><\/strong>weekly newsletter<\/em><\/strong><\/a> to get real estate market insights, news, and reports straight to your inbox.<\/em><\/strong><\/p>\n\n\n\n

To find out how much more affordable it is to rent rather than buy, Zoocasa analyzed 31 markets across the US and compared monthly rental prices and monthly mortgage payments in each. Additional costs were not considered, such as utilities or property taxes. <\/p>\n\n\n\n

Rental price numbers were sourced from Rent.com\u2019s February 2024 Rent Report<\/a>. Median single-family home prices were sourced from the National Association of REALTORS\u00ae<\/a> and are from Q4 2023. Monthly mortgage payments were calculated using the Nerd Wallet mortgage calculator<\/a>, assuming a 15% down payment and a 6.88% 30-year fixed rate. As of the week of March 7, 2024, according to Freddie Mac<\/a>, the U.S. average 30-year fixed rate was 6.88%, and according to the 2023 Profile of Home Buyers and Sellers from the National Association of Realtors\u00ae, in 2023 the median percent down payment for all home buyers was 15%.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

7 Cities Have Less than a $500 Gap Between Monthly Mortgage and Rent<\/h1>\n\n\n\n

Although it is more affordable to rent than buy in all of the cities we analyzed, six markets stand out for resale affordability. St. Louis, MO, Detroit, MI, Buffalo, NY, Chicago, IL, Philadelphia, PA, Memphis, TN, and New York, NY all have less than a $500 gap between the median rent and the average monthly mortgage payment, giving homebuyers in those cities a unique opportunity to consider homeownership as a financially viable option compared to renting. <\/p>\n\n\n\n

In St. Louis, MO<\/a> the median rent is $1,806, while the average monthly mortgage payment is just $40 more at $1,846. Of the 30 markets we analyzed, this is the smallest difference between rent and mortgage, positioning St. Louis as one of the best cities for homeownership. However, both Detroit, MI<\/a> and Buffalo, NY<\/a> have more affordable average monthly mortgage payments at $1,831 and $1,844 respectively. Detroit has the second-smallest gap between median rent and average mortgage, with a difference of $176, followed by Buffalo with a difference of $219. <\/p>\n\n\n\n