Renters have more options than they thought.
Rents have been rising across the country, and now in many cities throughout the U.S. it’s cheaper to buy a home rather than remain in a rental unit, a new Zillow study shows.
For the country overall, the median rent is $1,416 per month. That’s enough to cover the monthly expenses associated with owning a $289,505 home — well over the median U.S. home value of $196,500, the study says.
The trend holds true in 37 of the 50 cities analyzed by the online real estate company. It was most pronounced in places like Detroit, Cleveland, Milwaukee, Memphis, and Baltimore, where renters paying the median rent could afford to buy homes at least twice as expensive as the median home value without raising their monthly housing costs.
“Renters hesitant to enter the home buying market for fear of not being able to find an affordable home should be encouraged to discover they may have more options than they thought,” Zillow Chief Economist Dr. Svenja Gudell said in a press release.
Of course, the trend isn’t true everywhere. In notoriously expensive housing markets like San Francisco, New York, San Jose, and Honolulu, the median rent is still be more affordable than owning a home.
In San Francisco, the median home value is over $1.1 million, but the median monthly rent of $4,235 would only cover the monthly costs of a home priced around $866,000.
Although rents are near all-time highs, they’ve started moderating and even falling in some cities, and that could give more renters the opportunity to put aside more savings for a downpayment on a home, Gudell said.