Renting Is Still Cheaper Than Buying in Most Metros, but the Affordability Gap Is Shrinking

For the past two years, renting a home has been cheaper than paying a mortgage in most U.S. metro areas, but according to The New York Times, the gap between median gross rent and median costs for homes with a mortgage is shrinking. In 2021, the discrepancy between rental costs and mortgage payments in the nation’s 50 largest metro areas was $564 a month compared to a $593 gap in 2019, according to a recent study by LendingTree.

In metro areas with the priciest homes like San Jose, Calif., New York, and San Francisco, homeowners pay up to $1,262 more per month than renters, while the smallest gaps are in markets like Orlando, Fla., Phoenix, and Jacksonville, Fla., averaging just $252.

According to a recent study by LendingTree, in 2021, the difference between median gross rent and median costs for homes with a mortgage in the nation’s 50 largest metro areas was $564 a month.

That’s a nice chunk of savings for renters over the course of a year. Unfortunately, it wasn’t as much as in 2019, when renters paid an average of $593 less each month than homeowners with mortgages. The narrowing gap is explained in part by the falling mortgage rates of that time, which reduced monthly costs for many owners.

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