Home prices skyrocketed for two years but that ended about six months ago. The surge was brought on by low mortgage rates and the ability of people to work from home due to the COVID-19 pandemic. Many of those not tethered to an office moved. The demand these factors caused pushed prices higher in many American cities, and in most cases, those increases were by double-digit percentages. Rentals were often cheaper than owning homes. (Click here to see the best cities in which to rent new apartments.)
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The city where renting was more financially advantageous was Austin, Texas, one of America’s fastest-growing and most expensive cities.
According to Realtor.com’s December Rental Report: Despite Rent Growth, Renting a Starter Home Is More Affordable Than Buying: “In 45 of the 50 largest U.S. metros, the monthly cost of renting a home is lower than buying a starter home, and despite higher rents, renting has become relatively more affordable than buying year-over-year.”
Homeownership was 121% higher in Austin than renting, based on the monthly cost. The cost of owning a home was $3,682 a month, compared to rent of $1,695. Austin is among the most expensive home markets in America.
These are the markets where home ownership is more than 65% than renting:
| Metro | Median Rent | Monthly Buy Cost | % Difference |
|---|---|---|---|
| Austin | $1,659 | $3,672 | 121.3 |
| San Francisco | $2,943 | $5,798 | 97.0 |
| Seattle | $2,059 | $3,831 | 86.1 |
| San Jose | $3,156 | $5,777 | 83.0 |
| San Diego | $2,702 | $4,787 | 77.2 |
| Los Angeles | $2,870 | $5,020 | 74.9 |
| Boston | $2,868 | $4,965 | 73.1 |
| Portland | $1,750 | $2,996 | 71.2 |
| Phoenix | $1,592 | $2,708 | 70.1 |
| Sacramento | $1,834 | $3,075 | 67.7 |
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