With the cost of buying a home financially out of reach for most Americans, a growing number of people are choosing to rent a single-family home.
Nearly 2.5 million U.S. households have rented a single-family home in the past 12 months alone, according to an October estimate from the National Rental Home Council.
“It is generally less expensive to rent a home than to buy one, so for most Americans the path to homeownership starts with renting while saving for a down payment,” Yanling Mayer, an economist with real estate research firm CoreLogic, said in a report this week. “However, homeownership is becoming more elusive than ever for many people, as surging rents over the last few years have put an increasing financial burden on budgets.”
The lowest-cost cites for renting a single-family home across the U.S. are in the Midwest and the South. Here are the most most affordable metro areas, along with the median monthly rent, according to CoreLogic.
- Cleveland, Ohio ($1,395)
- Jacksonville, North Carolina ($1,400)
- Oklahoma City, Oklahoma ($1,595)
- Fayetteville, North Carolina ($1,600)
- St. Louis, Missouri ($1,650)
- Detroit, Michigan ($1,750)
- Fayetteville, Arkansas ($1,750)
- New Orleans ($1,750)
- College Station, Texas ($1,785)
- Tucson, Arizona ($1,875)
Of the millions of Americans who began renting a single-family home, most said they made the move because they wanted better housing, transferred to the area for a new job, needed cheaper housing or wanted to establish their own household, CoreLogic found.
Fully half of the nation’s renters today live in a single-family home, while the rest live in multifamily buildings such as an apartment complex or condominium, as well as in in mobile homes, according to CoreLogic. Renting a single-family home is the most expensive option of the three, with the median monthly rent tallying $2,600 as of September. Still, renting a place is cheaper than buying a home in most parts of the nation.
Here are the nation’s most expensive metro areas for renting a single-family home as of September, according to CoreLogic:
- Los Angeles ($4,750)
- San Diego ($4,500)
- San Jose ($4,300)
- San Francisco ($4,200)
- Ventura, California ($3,925)
- Riverside, California ($3,250)
- Miami ($3,200)
- Boston ($3,000)
- Bridgeport, Connecticut ($3,000)
- New York City ($3,000)
Soaring homeownership costs
The costs of owning a home have skyrocketed in recent years, driven largely by a shortage of properties on the market and, more recently, surging mortgage rates. The typical American household needs an annual income of $115,000 to afford the median priced home across the U.S., which is $40,000 more than what the average household makes, according to Redfin.
The median down payment on a home in September was nearly $61,000, the real estate firm’s data shows. That’s up roughly 15% from a year earlier, the biggest increase since June 2022.