These Are the U.S. Cities Where It’s Cheaper to Buy than Rent

published May 31, 2023
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As rent in the United States continues to climb steeply, so does the cost of home ownership. A recent report from real estate company Redfin found that, on average, it costs 25% more per month to own than rent.

In fact, the report also found that there are only four cities in the entire country where it’s cheaper to buy than rent a home — as in, the home’s estimated monthly mortgage cost is less expensive than its estimated monthly rent.

This uncommon trend is most noticeable in Detroit, Michigan, where the average home is 24% less expensive to buy than to rent. According to Redfin, the median estimated monthly mortgage payment for Detroit homeowners is $1,296. Meanwhile, the median estimated rent in the city is $1,697.

Next up is Philadelphia, Pennsylvania, where it’s 7% less expensive to buy than to rent. By contrast, the average monthly mortgage payment is $1,869, while average rent is $2,000. 

Coming in third is Cleveland, Ohio, where there’s a 4% discount when it comes to average monthly mortgage payments (which amount to $1,730) and average rental payments (which amount to $1,800).

However, the final city, Houston, Texas, has a much smaller disparity between rental and home ownership costs. There, the average monthly mortgage payment is $2,343, less than $100 cheaper than the average rental payment ($2,371).

In these four cities it’s cheaper to buy than rent, as home values there have stagnated in comparison the rest of the country. However, because housing markets there haven’t boomed, there are fewer opportunities for major busts, even if homeowners there might wind up building less equity.

“I wouldn’t encourage people to squeeze their budgets in order to buy a home when prices are falling and we’re teetering on a recession,” Redfin Deputy Chief Economist, Taylor Marr, said in the report. “In the years leading up to the pandemic, it made sense for homebuyers to break the rule that says not to spend more than 30% of your income on monthly housing costs, but these times are more risky, so it makes sense to be a little more conservative.”