The median asking rent for zero to two-bedroom units is down 2.1% year over year to $1,711 in June. Even after 23 straight months of annual declines, the U.S. median rent was only $48 (-2.7%) below its August 2022 peak, according to the latest Realtor.com Rental Report.
Compared with pre-pandemic levels, rents are still up by $268 (18.6%) over June 2019. However, the gap between renting and buying is closing across much of the country.Â
“Even with rents leveling for nearly two years, high mortgage rates and still-elevated home prices mean renting remains the more budget-friendly option in nearly every major market,” says Danielle Hale, chief economist at Realtor.com. “But the narrowing rent versus buy gap we’re seeing in most cities is a signal that the affordability landscape is starting to shift. Renters eyeing homeownership will want to pay close attention in the months ahead.”
Across the 50 largest metros, median asking rents are down $36 (-2.1%) from last year and nearly $50 below the 2022 peak. All unit sizes declined, with studios falling 2.3%; one-bedroom units, 2.6%; and two-bedroom units, 2.1%.
Although the gap is closing, renting remains more affordable than buying in 49 out of 50 metros, as Hale notes. Austin, Texas, offers the largest monthly savings for renters compared with buyers, where buying would cost 114.7% more than renting, Realtor.com points out. However, the average monthly savings for renters now stands at $908, down $48 from $956 a year ago.
The top 10 rent-favoring markets include:
- Austin-Round Rock-Georgetown, Texas
- Los Angeles-Long Beach-Anaheim, California
- San Francisco-Oakland-Berkely, California
- Seattle-Tacoma-Bellevue, Washington
- Phoenix-Mesa-Chandler, Arizona
- Sacramento-Roseville-Folsom, California
- New York-Newark-Jersey City, New York-New Jersey-Pennsylvania
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee
- San Diego-Chula Vista-Carlsbad, California
- Boston-Cambridge-Newton, Massachusetts-New Hampshire
Pittsburgh remains the only major metro where buying a starter home is less than renting, but this is changing, Realtor.com says. In the notoriously expensive California metro of San Jose, renters were saving $2,614 per month renting over buying last year, but that’s shrunk by $349 in the same time frame.
In contrast, Birmingham, Alabama, saw the most significant increase in rental savings over the past 12 months, and Memphis, Tennessee, also flipped from favoring buying to renting over the past year. Memphis also ranks third on the list of metros with an increasing advantage in renting.