Not surprisingly, California cities rank high in a new list of places where it is cheaper to rent vs. to own a starter home. San Jose-Sunnyvale-Santa Clara, Calif. ranked number six on the list behind San Francisco-Oakland-Berkeley, Calif. (4) and Los Angeles-Long Beach-Anaheim, Calif. (5), according to the Realtor.com study. Austin-Round Rock, TX took the top spot.
In the South Bay, the median rent on a starter home was $3,206 in February 2024 compared to the median mortgage cost of $5,986, according to the study. That is a whopping 86.7 percent difference. This is despite that rents have creeped up and high home prices have slowed over the past year in the region. In the rest of the Bay Area, the median rent was slightly lower at $2,815 and the monthly buy cost was $5,504 — a 95.5 percent difference.
Overall, the study found that it is more affordable to rent than to buy in all the top 50 U.S. metros compared to 45 last year. It cites high mortgage interest rates, lofty home prices and falling rents nationally for the increase.
Here is the list of top 10 metros with the largest rent vs. buy savings:
1. Austin-Round Rock-Georgetown, Texas – $2,165 monthly rent savings (141.5% difference)
2. Seattle-Tacoma-Bellevue, Wash. – $2,422 (121.1%)
3. Phoenix-Mesa-Chandler, Ariz. – $1,528 (99.0%)
4. San Francisco-Oakland-Berkeley, Calif. – $2,689 (95.5%)
5. Los Angeles-Long Beach-Anaheim, Calif. – $2,539 (89.7%)
6. San Jose-Sunnyvale-Santa Clara, Calif. – $2,780 (86.7%)
7. Nashville-Davidson-Murfreesboro-Franklin, Tenn. – $1,366 (86.0%)
8. Portland-Vancouver-Hillsboro, Ore. Wash. – $1,396 (84.4%)
9. Sacramento-Roseville-Folsom, Calif. – $1,514 (82.1%)
10. Houston-The Woodlands-Sugar Land, Texas – $1,103 (80.0%)