10 Cities Where Renting Is Cheaper Than Buying

For many, buying a first home is a major milestone. However, depending on the city in which you reside, homeownership is not always a realistic, practical or attainable goal. In fact, in many places around the U.S., renting is considered cheaper than buying – and therefore, from a financial standpoint, it may actually make more sense to rent than to buy a home. Curious where exactly we’re talking about? Fortunately, the Urban Institute has done the research for you.

Last fall, the Washington, DC-based think tank examined 33 large metropolitan statistical areas. Within each metro area, the Urban Institute studied the difference between homeownership costs and rental costs. The difference between these two factors is known as the “rent gap.” The larger the rent gap, the more it makes sense to rent in that city. During the course of the study, the Urban Institute found that many of the metro areas where renting is cheaper than buying happened to be located on the West Coast. According to the Urban Institute, cities such as San Francisco, San Jose and Seattle topped the list of cities where renting is cheaper than buying. The study found that this was due to an ongoing “supply shortage and surge in housing demand.” For a look at the top 10 cities with the highest rent gaps, read our quick synopsis below.

10 U.S. Cities Where Renting is Cheaper Than Buying

San Francisco, CA

San Jose, CA

San Diego, CA

Seattle, WA

Portland, OR

Las Vegas, NV

Denver, CO

Sacramento, CA

Los Angeles, CA

Washington, DC

So where is buying a home a good deal?

According to the Urban Institute, cities such as Detroit, New York City, Philadelphia and Pittsburgh are increasingly becoming more homeowner-friendly, “thanks to a dip in home prices and rising incomes.” Metro areas with small and/or decreasing rent gaps where its cheaper to own a home than to rent one include: Detroit-Warren-Dearborn, MI; Pittsburg, PA; Philadelphia-Camden-Wilmington, PA-NJ-DE-MD; New York-Newark-Jersey City, NY-NJ-PA; Chicago-Naperville-Elgin, IL-IN-WI; Cleveland-Elyria, OH; Cincinnati, OH-KY-IN; Tampa-St. Petersburg-Clearwater, FL; Miami-Fort Lauderdale-West Palm Beach, FL; Houston-The Woodlands-Sugar Land, TX; Atlanta-Sandy Springs-Roswell, GA; Columbus, OH; Charlotte-Concord-Gastonia, NC-SC; Minneapolis-St. Paul-Bloomington, MN-WI; St. Louis, MO-IL; San Antonio-New Braunfels, TX; and Kansas City, MO-KS.

Other reasons why renting is a good idea

Besides the financials, here are 4 reasons why renting is a good idea.

You’re not sure how long you plan to stay in the city – Move around often? If so, it’s probably a good idea to rent instead of buy. This will give you the flexibility you need when and if you have to move again.
You’re on a tight budget and need a roommate to help cover costs – From mortgage payments to insurance costs, owning a home is expensive. If you’re not financially stable, it may be best to rent and split costs with a roommate.
You prefer to have a landlord take care of maintenance and repairs for you – Not much of a handyman? Fortunately, a landlord can take of necessary repairs and maintenance needs for you.
You prefer to live in a specific neighborhood where you could not normally afford to buy – While you may not be able to afford a home in your dream neighborhood, you may be able to afford to rent there – especially if you have a roommate.

Ready to move?

To learn more about these fantastic cities, check out Moving.com’s City Profile Report feature. Our in-depth reports include city demographics, real estate information, quality of life factors and more. Simply enter the zip code or the state and city of your potential move to get a free report at the click of a button. If you think you want to make one of these cities your new home, you may need to hire professionals to handle your relocation. Fortunately, Moving.com’s extensive network of reputable and reliable movers makes it easy to book the best moving company for the job. All relocation companies in our network are licensed and insured, so you can rest assured that your move will be in good hands. Best of luck and happy moving!