AUSTIN, TX — Median asking rents across the United States reached $1,703 in January, reflecting a slight 0.2% year-over-year decline, according to Realtor.com®’s January Rent Report. This modest drop signals a gradual shift toward more renter-friendly conditions in many markets, driven by falling rental prices and persistently high mortgage rates. However, renting remains the more affordable option compared to buying in all but two of the nation’s 50 largest metro areas.
Renting Versus Buying
The report highlights the rare cases of Detroit, Michigan, and Pittsburgh, Pennsylvania, as the only metros where buying a median-priced home is more affordable than renting. Both cities continue to benefit from low median home prices, with Pittsburgh’s median listing price at $229,700 and Detroit’s at $239,950. Meanwhile, the share of income spent on rent in Detroit has risen, while Pittsburgh has seen little change, further tilting the affordability scales toward homeownership in these rust belt metros.
“For most Americans owning a home is still a big part of the American Dream, yet the lower monthly costs of renting in all but two of the 50 largest markets are a key consideration,” said Danielle Hale, chief economist, Realtor.com®. “This relative cost advantage is one of the reasons we expect an increase in renter households and declines in the homeownership rate in 2025.”
Rental Affordability Since the Pandemic
Although rents have edged downward, they remain significantly higher than pre-pandemic levels, underscoring the lingering impact of the rapid rent hikes in 2021 and 2022. January’s figure, though lower than the same period in 2023 and 2024, is still $257 or 16.1% above January 2020 levels, suggesting current affordability improvements offer limited relief for renters still navigating inflated costs.
Regional Trends in Renting and Buying
Rental affordability trends also reveal variations across other major metros. Metros such as New York, San Jose, California, and Detroit stand out as areas where income demands for both renting and buying have increased, making these cities less favorable for either option. Conversely, Kansas City, Kansas, has shifted toward being more buyer-friendly, with rent requiring a greater share of income than a year ago, while buying demands less.
Meanwhile, 18 metros have become increasingly rent-favoring, reflecting a broader national trend where renting requires a smaller share of income compared to the financial strain of homeownership. These include areas such as Baltimore, Boston, Charlotte, Chicago, and Houston.
Looking Ahead
This affordability analysis sheds light on the evolving housing market landscape as renters and buyers weigh their options. While renting remains the dominant choice for affordability across most U.S. metros, the persistence of elevated rents and high home prices may continue to influence housing preferences in 2025.
With expectations for a growing share of renter households and a declining homeownership rate, market dynamics will likely be shaped by further rental repricing and economic conditions impacting mortgage rates and income growth. The coming year will be pivotal as potential buyers and renters strive to find financial balance in an evolving market.
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