However, according to the Realtor.com January Rent Report, in all major U.S. metros except Detroit and Pittsburgh, renting a median-priced unit is still more affordable for median wage earners than purchasing the median-priced for-sale listing, even though most metros have become more affordable for both buyers and renters in the past year.
The impact of the steady decline in rental costs and the continued high mortgage rates is demonstrated by the six markets in January of last year where purchasing was less expensive than renting. The overall market has shifted in favor of renters within the past 12 months.
“For most Americans owning a home is still a big part of the American Dream, yet the lower monthly costs of renting in all but 2 of the 50 largest markets are a key consideration,” said Danielle Hale, Chief Economist at Realtor.com. “This relative cost advantage is one of the reasons we expect an increase in renter households and declines in the homeownership rate in 2025.”
Renting Less Expensive than Buying in All but Two Major U.S. Metros
Of the top 50 metro areas analyzed, Pittsburgh and Detroit have the lowest median listing prices, at $229,700 and $239,950, respectively. When it comes to purchasing a property, these Rust Belt metro areas are frequently among the most affordable in the country. In fact, purchasing a home has become more cost-effective than renting one, since the percentage of income spent on rent in Detroit has been rising annually and staying almost constant in Pittsburgh.
Further, Renters are still suffering from the sharp increase in rents in 2021 and 2022, despite the fact that rents are declining. Although the rent for January 2025 is less than that of January 2024 and January 2023, it is still $257 (16.1%) more than that of January 2020.
Measuring U.S. Markets Where Rent is Favored Over Buying
Although renting is still more cost-effective than owning in the majority of metro areas, this study examines the correlation between salary growth, mortgage rates, median rent, and media listing price to determine which metro areas favor renting and which prefer buying.
The only metro areas where the percentage of income spent on both rent and home ownership is increasing are New York, San Jose, CA, and Detroit. These metro areas are less renter-friendly and less buyer-favoring because it costs more money to buy a median-priced property and rent a median-priced rental unit.
Kansas City, KS, is one metro area that is shifting in favor of buyers. Rent takes up a larger portion of income in Kansas City, while purchasing purchases take up a smaller portion. Rent-favoring metro areas are 18 where purchasing a home now requires a larger percentage of the median earner’s salary than it did a year ago.
Top 10 Metros Becoming More Renter-Friendly and Less Buyer-Friendly
| Metro | Percent of Income Spent on Buying (change YoY) | Percent of Income Spent on Rent (change YoY) |
| Baltimore-Columbia-Towson, MD | 2.2 % | -0.4 % |
| Boston-Cambridge-Newton, MA-NH | 1.0 % | -0.2 % |
| Charlotte-Concord-Gastonia, NC-SC | 1.4 % | -1.4 % |
| Chicago-Naperville-Elgin, IL-IN | 0.2 % | -1.4 % |
| Houston-Pasadena-The Woodlands, Texas | 0.2 % | -1.3 % |
| Las Vegas-Henderson-North Las Vegas, NV | 0.5 % | -1.9 % |
| Los Angeles-Long Beach-Anaheim, CA | 1.2 % | -1.8 % |
| Memphis, TN-MS-AR | 0.4 % | -2.4 % |
| Milwaukee-Waukesha, WI | 3.0 % | -0.1 % |
| Minneapolis-St. Paul-Bloomington, MN- WI | 0.6 % | -0.4 % |
Larger Apartments Continue to See Negative Rents, Studio Rents Level Off YoY
Rents for units with zero, one, and two bedrooms were not all declining year-over-year for the first time since July 2023. While larger units are still somewhat declining, studio rent growth has gone back up to even (0% change) year-over-year in January 2025, just like it did in that month. Studio rent was $1,423, up 11.4% since January 2020 and the same as it was in January of last year.
Rent for larger apartments dropped to $1,585 for one-bedroom apartments and $1,887 for two-bedroom apartments, below its January 2024 levels. Longer-term rent hikes for these larger units have been higher, rising 16% and 20%, respectively, in comparison to January 2020 for one-bedroom and two-bedroom flats.
National Rental Data – January 2025
| Unit Size | Median Rent | Rent YoY | Rent Change – 5 Years |
| Overall | $1,703 | -0.2 % | 16.1 % |
| Studio | $1,423 | 0.0 % | 11.4 % |
| 1-Bedroom | $1,585 | -0.1 % | 16.0 % |
| 2-Bedroom | $1,887 | -0.2 % | 20.0 % |
To read the full report, including more data, charts, and methodology, click here.
