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Rent vs. Buy: Shocking disparities revealed in 50 major metro areas

By FOX 5 Atlanta Digital Team
Published  March 27, 2024 1:42pm EDT
Atlanta
FOX 5 Atlanta
article

A sign advertising apartments for rent is displayed in front of an apartment complex in San Francisco, California. (Credit: Justin Sullivan/Getty Images)

ATLANTA - Housing affordability has reached its lowest point in decades due to a surge in home prices and mortgage rates.

It is now cheaper to rent in all 50 of the largest metro areas in America than it is to buy a starter home. 

The newest report from Realtor.com examined the 50 top metro areas and compared the median monthly payment for a starter home with the cost to rent an apartment.

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The report found that Atlanta was in the middle of the list. The average monthly payment for a starter home in Atlanta is $2,453, while the average monthly cost to rent an apartment is $1,613—a difference of $840 or 52.1%.

The top 10 metros with the largest rent vs. buy savings are:

  1. Austin-Round Rock-Georgetown, Texas – $2,165 monthly rent savings (141.5% difference)
  2. Seattle-Tacoma-Bellevue, Wash. – $2,422 (121.1%)
  3. Phoenix-Mesa-Chandler, Ariz. – $1,528 (99.0%)
  4. San Francisco-Oakland-Berkeley, Calif. – $2,689 (95.5%)
  5. Los Angeles-Long Beach-Anaheim, Calif. – $2,539 (89.7%)
  6. San Jose-Sunnyvale-Santa Clara, Calif. – $2,780 (86.7%)
  7. Nashville-Davidson-Murfreesboro-Franklin, Tenn. – $1,366 (86.0%)
  8. Portland-Vancouver-Hillsboro, Ore. Wash. – $1,396 (84.4%)
  9. Sacramento-Roseville-Folsom, Calif. – $1,514 (82.1%)
  10. Houston-The Woodlands-Sugar Land, Texas – $1,103 (80.0%)

The metro areas with the smallest difference in average costs are:

  1. Pittsburgh - $1,425 (1.3%)
  2. Memphis, Tenn. - $1,251 (2.2%)
  3. St. Louis, Mo. - $1,300 (7.7%)
  4. Baltimore-Columbia-Towson, MD - $1,783 (10.7%)
  5. Birmingham-Hoover, Ala. - $1,241 (14.0%)

Historically, monthly mortgage payments for a new home were roughly equal to monthly rental payments. But, the average monthly mortgage payment has increased more than 70% since the end of 2019. 

According to new research from Zillow, individuals looking to buy a home in the United States now need an average income exceeding $106,000 ($115,430 in Atlanta), which is an 80% (94.2%) increase from January 2020.

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Furthermore, the average monthly mortgage payment in Atlanta has skyrocketed by 112.7% to $2,364, assuming a 10% down payment.

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Georgia is also faring better than some states when it comes to foreclosures.

A recent report by ATTOM revealed that despite an uptick in general foreclosure filings across the U.S., there has been a significant decline in completed foreclosures in Georgia. Instead, foreclosures fell by 52% in Georgia. You can read more about it here.