Breaking Free from the Rent Trap: 10 Cities Where Buying a Home Is Now More Affordable Than Renting
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Lower Mortgage Rates Bring Homeownership Within Reach
Lower mortgage rates are breathing new life into the dream of homeownership. That’s according to a new analysis by Zillow Home Loans, which found that monthly mortgage payments are now lower than rents in 22 of the 50 largest U.S. cities.
A Welcome Development
Buyers in New Orleans and Chicago, for instance, can save more than $400 a month by buying instead of renting. On a national level, the report found the typical mortgage payment is $236 lower than the typical rent payment, assuming the buyer can put 20% down and qualify for a 6.5% mortgage rate on a 30-year fixed-rate loan.
For Buyers Who Have Been Waiting
“For buyers who have been waiting in the wings, today’s market represents a good entry point,” Orphe Divounguy, senior economist at Zillow Home Loans, tells Money. Mortgage payments on a typical home purchased today would cost a buyer $1,200 less per year than one bought in May, when rates were at a 2024 peak, he adds.
Buying vs. Renting: Which Makes More Financial Sense?
Just because mortgage rates are lower doesn’t necessarily mean that buying property is the right move for you. The decision will also depend on your lifestyle, income and future goals.
The Top 10 Cities Where Buying is Cheaper Than Renting
These are the top 10 U.S. cities where buying is cheaper than renting followed by how much you’ll save each month by buying, according to Zillow’s report.
- New Orleans, Louisiana: $446
- Chicago, Illinois: $434
- Pittsburgh, Pennsylvania: $321
- Miami, Florida: $314
- Memphis, Tennessee: $290
- Cleveland, Ohio: $265
- Detroit, Michigan: $213
- Tampa, Florida: $191
- Oklahoma City, Oklahoma: $188
- Houston, Texas: $182
