AZ Business Magazine
For many Americans hoping to make the transition to first-time buying in 2023, renting will likely offer relatively more affordable options in the months ahead, according to the Realtor.com® Monthly Rental Report released today. On average across the 50 largest U.S. metros in December, a typical renter faced a 41.4% ($792) lower monthly payment than a starter homeowner. Renting in Phoenix seems to be the way to go. Metro Phoenix ranks No. 9 among markets with the largest monthly savings for renters. The monthly starter home cost in Metro Phoenix is $2,708, while the median monthly rent cost is $1,592, a difference of more than 70%.
The markets with the largest monthly savings for renters, ranked by the percent difference between monthly mortgage payments and asking rents, include:
- Austin, Texas (121.3% or $2,013)
- San Francisco, Calif. (97.0% or $2,855)
- Seattle, Wash. (86.1% or $1,772)
- San Jose, Calif. (83.0% or $2,621)
- San Diego, Calif. (77.2% or $2,085)
- Los Angeles, Calif. (74.9% or $2,150)
- Boston, Mass. (73.1% or $2,097)
- Portland, Ore. (71.2% or $1,246)
- Phoenix, Ariz. (70.1% or $1,116)
- Sacramento, Calif (67.7% or $1,241)
“Despite the fact that renting will likely be cheaper than buying in 2023, rental affordability will remain a key issue throughout the year. We expect rents will keep hitting new highs, driven by factors including still-low vacancy rates, lagging new construction and demand from would-be first-time buyers,” said Realtor.com® Chief Economist Danielle Hale. “For prospective first-time buyers, the key consideration when figuring out whether to buy or rent is how long you plan to live in your next home. If you’re looking for flexibility to move in the shorter term, renting may be your best bet, and still offer opportunities to save if you’re able to compromise on factors like proximity to the downtown area. Whereas buying could be the better option if you’re planning to stay put for at least five years. Market conditions will play a role, but ultimately the timing comes down to your personal situation, and tools like the Realtor.com® Rent vs. Buy Calculator can help you organize and make sense of the many considerations.”
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