A new report from Realtor.com has found that it is now cheaper to rent an apartment than buy a starter home in the 50 largest metropolitan areas of the United States, according to February data.

In February, rents for units with 0-2 bedrooms fell for the seventh consecutive month. Rents in the 50 largest metro areas fell to a median of $1,708 per month in February, a $4 drop from January and a $7 drop (-0.4 percent) since last year. The cost of buying a home, meanwhile, was $1,027 (or 60.1 percent) higher than renting in all 50 metro areas.

In Austin and Seattle, a starter home is more than twice as expensive as a rental unit. Phoenix and San Francisco were not far behind. Nashville, Phoenix, Memphis, Raleigh, and Richmond experienced the greatest disparities.

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Monthly savings from renting were calculated to be $162 higher than prior years in the metro areas. Mortgage rates, meanwhile, have risen about 7 percent in certain parts of the US as the Federal Reserve maintains higher interest rates.

But rents aren’t necessarily cheap from an objective standpoint: they were just $50 less (-2.8 percent) than they were at their peak in August 2022. February 2024 rents were $252 (17.3 percent) higher than they were in February 2020, before COVID hit.

According to a new study from Bankrate, one must make over $110,000 a year to afford the median-priced house in 22 states. In January 2020, the average home buyer had to make about $75,000, representing a 46 percent increase. From 2020 to now, the median home price has leaped from $290,000 to $412,000, a 41 percent increase.

“Home values are near record highs, and if you want a house, you have little choice but to pay a high price,” said Bankrate housing market analyst Jeff Ostrowski.

Shane Devine is a writer covering politics, business, and culture for Valuetainment. Follow Shane’s work here.

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