The Washington PostDemocracy Dies in Darkness

Where buying a home is cheaper than renting one

Richard and Astardii Hopkins shop for a home in Birmingham, Ala., in 2019. A new report by ranks Birmingham No. 1 among cities where it's cheaper to buy a home than rent one. (Cameron Carnes for The Washington Post)
Placeholder while article actions load

While every decision about whether to rent or buy a home is an individual lifestyle and financial choice, you can also weigh local market rents and home prices to analyze which is more affordable.’s July Rental Report compared starter home prices in 50 of the largest metro areas with median rents to evaluate where buying costs less.

Overall, the study found that the median rental price rose 9.8 percent in July 2021 compared to July 2020 and was 15.5 percent higher than the monthly starter home payments in 24 of those 50 housing markets. Rents also rose 12.2 percent in July above rents in July 2019. found that the median rents reached record highs in 40 of the 50 markets.

To make the comparison, median rents include studio, one- and two-bedroom units in apartments and private rentals of condos, townhouses and single-family homes. The monthly cost of buying was calculated by averaging the median listing prices for studios and one- and two-bedroom homes. Typical monthly homeowner association fees were included.

New tool uses rent payments to help young people establish credit

The top 10 markets that favor buying over renting in July were typically places that saw a sharp increase in rents and include:

1. Birmingham, Ala. (33.1 percent cheaper to buy)

2. St. Louis (29.4 percent)

3. Pittsburgh (27.7 percent)

4. Orlando (25.9 percent)

5. Cleveland (25.7 percent)

6. Tampa (22.9 percent)

7. Baltimore (20.5 percent)

8. Indianapolis (20.4 percent)

9. Virginia Beach (19.2 percent)

10. Riverside, Calif. (18.5 percent)

The top 10 markets that favor renting over buying were typically tech hubs and cities that are among the most expensive housing markets in the country and include:

1. Austin (79.2 percent cheaper to rent)

2. San Jose (47.5 percent)

3. San Francisco (44.4 percent)

4. Seattle (44.2 percent)

5. Boston (40.9 percent)

6. Los Angeles (39.4 percent)

7. New York (32.0 percent)

8. Dallas (26.9 percent)

9. Rochester, N.Y. (26.5 percent)

10. Portland, Ore. (26.4 percent)

In Washington, D.C., the cost difference between buying and renting is 4.3 percent, which favors renting.

For the full report, click here.

Read more in Real Estate:

Is the red-hot housing market starting to cool?

Tips for home buyers: How to offset rising mortgage rates

Newly built condos for under $400,000 in Southeast D.C.