Price increases throughout the U.S. economy over the past few years have made nearly everything more expensive, but perhaps no spending category has squeezed Americans’ budgets like the cost of housing. Between high costs to buy a home and skyrocketing rents, non-homeowners are faced with impossible choices throughout the market.
Throughout 2020 and 2021, low interest rates and rising household savings and incomes positioned many Americans to buy real estate. But high competition and low supply created a boom in the residential real estate market that sent home prices in the U.S. to record highs. With home prices persistently high and interest rates remaining elevated to tamp down inflation, more would-be buyers have been priced out, increasing the competitiveness of the rental market and in turn driving rents upward.
These shifting conditions have made things difficult for households debating whether to buy or rent. Shelter is already the largest spending category for most U.S. households, but larger economic trends have raised the financial stakes on the buy-or-rent decision.
Here are the key takeaways from the analysis:
- The affordability gap flipped fast: Since the start of 2021, mortgage rates have more than doubled and home prices remain approximately 33% higher, driving a surge in the “buying premium” across most U.S. markets.
- Buying remains more expensive than renting: As of early 2026, the national median monthly mortgage payment is 20% higher than the median rent, a dramatic reversal from the 2010s when buying was often cheaper.
- Only a small fraction of cities favor buyers: Just 95 out of the 838 U.S. cities analyzed still offer a cost advantage to buying—mostly in lower-cost Southern and Rust Belt markets.
- Location drives extreme differences: In over 100 cities, the median monthly mortgage payment is now more than double the median rent. But places like Detroit and Cleveland offer 40% to 60% savings for buyers compared to renters.
The Cost of Buying Versus Renting Over Time
Amid high interest rates and home prices, the buying premium has skyrocketed
Source: Construction Coverage analysis of Zillow, U.S. Census Bureau, and Freddie Mac data | Image Credit: Construction Coverage
For years, the typical monthly cost of homeownership—after accounting for sale prices, mortgage rates, and property taxes—remained well below the cost of renting in the U.S. The aftermath of the Great Recession, combined with an extended period of low interest rates, kept mortgage payments affordable throughout much of the 2010s. Even as home prices surged in the competitive housing market of 2020 and 2021, historically low borrowing costs continued to make buying a home more financially attractive than renting.
However, by 2022, the equation shifted. A combination of soaring home prices and rapidly rising interest rates made renting the more affordable option in most markets. Mortgage rates have more than doubled since reaching record lows in January 2021, and while home price growth has slowed, the median home price remains approximately 33% higher over the same period. As of February 2026, the typical monthly mortgage payment (including property taxes) for a home in the U.S. is now 20% higher than the typical monthly rent.
The Cost of Buying Versus Renting by City
Residents in California & Washington will pay the largest premium to buy
Source: Construction Coverage analysis of Zillow, U.S. Census Bureau, and Freddie Mac data | Image Credit: Construction Coverage
And within some geographic markets, buying is unquestionably more difficult. Locations that face low supply, competitive markets, and high home prices—like cities throughout California and in the greater Seattle, WA region—can be four or even close to five times more expensive for buyers. Cities like fast-growing Draper, UT, and historic Newton, MA, are also proving especially challenging for buyers.
Out of the 838 U.S. cities considered in this analysis, only 95 are currently more affordable for buyers than renters. Most of these locations are found in Southern states like Alabama, Georgia, and Texas or in Rust Belt locations like Ohio and Michigan. In these locations, home costs remain relatively low, allowing buyers to save relative to the cost of renting.
The analysis was conducted by Construction Coverage—a company that provides resources, research and industry analyses for the construction industry—using data from Zillow, the U.S. Census Bureau, and Freddie Mac. For more information, refer to the methodology section. For complete results, see Cities Where It’s Cheaper to Buy Than Rent on Construction Coverage.
The Cheapest Large Cities for Homebuyers
The Cheapest Counties for Homebuyers
Methodology
Photo Credit: Imagenet / Shutterstock
The data used in this study is from Zillow’s Home Value Index (ZHVI) and Observed Rent Index (ZORI), U.S. Census Bureau’s 2024 American Community Survey (ACS), and Freddie Mac’s Primary Mortgage Market Survey. To determine the relative cost of buying vs. renting by location, researchers calculated the percentage difference in the monthly mortgage payment and property taxes for a median price home compared to the monthly rent payment for a median price rental. The monthly mortgage payment reflects a 30-year mortgage with a 10% down payment at a 6.22% interest rate based on the current ZHVI as of February 2026. Monthly property tax estimates were obtained using ACS data by dividing aggregate annual property taxes paid in each location by the aggregate value of all homes. The resulting percentage was multiplied by the median home price and divided by 12. Only locations with available data from all sources were included in the analysis. To improve relevance, cities were divided into groups based on population size: large (350,000+), midsize (150,000–349,999), and small (100,000–149,999).
For complete results, see Cities Where It’s Cheaper to Buy Than Rent on Construction Coverage.
