Renting's Advantage Over Buying Shrinks in 7 Markets

Renting a starter home remains more affordable than buying across all of the 50 largest metropolitan areas in the United States, however, this financial advantage is diminishing. In July 2026, the average monthly cost to buy a starter home exceeded renting by $858, as detailed in Realtor.com's July 2026 Rental Report. This premium has significantly reduced in certain markets, with Orlando, Florida, experiencing a buying premium of only $19. Jiayi Xu, a senior economist at Realtor.com and the report's author, attributes this shift to a combination of moderating home prices and increasing wages. Xu stated that these combined trends are creating an environment that increasingly supports homeownership, noting that home prices are declining at a faster rate than rents, while income growth is strengthening the financial standing of potential buyers. Reflecting this changing sentiment, a survey conducted by Bank of America revealed that for the first time since 2023, a majority of Americans, specifically 53%, now express a preference for buying a home over renting or living with family. Xu further elaborated that while renting might be cheaper in the present, the opportunity to purchase a home is not necessarily worsening and, in many locations, is actually improving relative to renting. The primary drivers behind buying's resurgence are found on the ownership side of the housing equation. Home prices have seen a steeper decline than rental rates. Nationally, across the 50 largest metropolitan areas, the median listing price for starter homes (defined as 0- to 2-bedroom properties) decreased by 2.9% year-over-year in July. In contrast, rents saw a more modest decline of 1.4% during the same period. Concurrently, the availability of lower-priced homes has increased. A separate analysis by Realtor.com indicated that there are now 220,000 more homes listed for sale at prices below $350,000 compared to the peak of the starter home shortage in 2022. The proportion of available listings priced under this $350,000 threshold has also risen by 1.6 percentage points from the previous year. These factors have collectively contributed to a reduction in the overall cost of purchasing a home. Xu's estimates suggest that the monthly expense of buying a starter home in July was approximately $89 less than it was a year prior. Of this reduction, $57 is attributable to changes in typical listing prices, and an additional $33 is due to a decrease in mortgage rates, which averaged 6.54% in July, down from previous levels. The report highlights that seven specific markets have transitioned to a buyer-friendly environment, meaning the cost to buy is now less than the cost to rent.