Is It Cheaper to Rent or Buy a Home? Analyzing Space, Cost, and Value in 2024

Based on an analysis of the top 20 single-family rental markets, it remains cheaper to rent than to own when comparing the total monthly cost of renting to the combined monthly mortgage payment and maintenance costs for a comparable starter home. However, this financial advantage often comes with a significant trade-off: less living space, especially in high-demand cities. This article breaks down the latest data on rental prices, apartment sizes, and regional trends to help you understand the true value of renting today.

Why Is Renting Often More Affordable Than Buying?

The core financial advantage of renting stems from not being responsible for a down payment, property taxes, homeowners insurance, and major repair costs. When comparing a monthly rent payment to a mortgage payment for a similar property, the rental cost is frequently lower. This calculation is particularly relevant for starter homes, where the financial barrier to entry for buying is high. It's important to conduct a personalized rent-versus-buy analysis, as this outcome can vary based on location, interest rates, and how long you plan to stay in the home.

Where Are Renters Getting the Least Space for Their Money?

In several popular coastal cities, the trend shows that rental units are not only expensive but are also shrinking in size. This creates a scenario where tenants pay a premium for less square footage.

• Seattle, WA: The average rental is 649 square feet (57 square feet smaller than a decade ago) with a median rent of $1,960 per month.
• Portland, OR: The average unit is 668 square feet (79 square feet smaller than a decade ago) with a median rent of $1,658.
• Washington, DC: The average rental is 745 square feet (54 square feet smaller) and commands an average rent of $2,291.
• Nashville, TN: Despite being in the South, newer apartments average just 834 square feet (2% smaller than before) with a median rent of $1,525.

Are Apartments Getting Bigger in Any Major Cities?

Contrary to the national trend in many cities, several major metropolitan areas have seen average rental sizes increase over the past decade, though their prices remain among the highest in the country.

Which U.S. Cities Offer the Most Rental Space on Average?

If square footage is a top priority, the Southern U.S. dominates the list for the largest average rental units. These cities often provide better value in terms of cost per square foot.

• Tallahassee, FL: Ranks first with an average of 1,130 square feet for new units. The median rent is $1,727. The city's large student population influences the demand for spacious, multi-bedroom rentals.
• Gainesville, FL: Offers an average of 1,122 square feet for a median rent of $1,771, appealing to University of Florida students and families.
• Baton Rouge, LA: Average rentals are 1,055 square feet with a median rent of $1,238, benefiting from the influence of Louisiana State University.
• Knoxville, TN & Marietta, GA: Both cities offer average rentals of 1,041 square feet, with median rents around $1,719.

To make your rental search efficient, use online platforms that allow you to filter by price, square footage, and essential features. Based on our experience assessment, enlisting the help of a local real estate agent can also provide access to off-market listings and save significant time.