If you live in the big city, it’s officially better to rent than buy a home pretty much anywhere, according to financial products comparison site Bankrate.
The monthly cost of renting across all 50 of the largest metro statistical areas (MSA) is 37% cheaper than buying a typical home, Bankrate said. As of February, the typical monthly mortgage payment of a median-priced home in the U.S. was $2,703, while the typical monthly rent nationally was $1,979.
With such a large gap between what it takes to buy versus renting a home, Americans who are already financially stretched should feel confident they’re making the right choice to rent right now, said Bankrate Analyst Alex Gailey.
“For those weighing whether they should rent or buy right now, all signs point to renting as the most cost-effective option in most major U.S. cities,” Gailey said.
Where are the biggest gaps between renting and buying?
In 21 of the 50 largest U.S. metros, the typical monthly cost of owning is at least 50% more expensive than the typical monthly cost of renting. Four of the five top metros with the largest gap are in the West, where the cost of living tends to be higher, Bankrate said.
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- San Francisco-Oakland-Berkeley, California: The average monthly rent is $3,024, while the typical mortgage payment is $8,539 for a 180.7% spread.
- San Jose-Sunnyvale- Santa Clara, California: Monthly rent is $3,255 on average vs a mortgage payment of $8,539 for a 162.3% gap.