Starter Home Rentals Outpace Property Purchases in Affordability

Renting a starter home continues to be more affordable than purchasing one in all 50 of the largest metropolitan areas in the United States, as indicated by the Realtor.com July 2026 Rent Report. Nevertheless, trends in home prices, rental rates, and wage growth in seven specific markets suggest that a buying opportunity may be approaching, even as the Realtor.com Market Clock indicates conditions that are either favorable or leaning towards buyers in these regions.

The benefits of renting have diminished over the past year, as the costs of starter homes have decreased at a faster rate than rents, thus creating a more advantageous environment for potential buyers in certain markets.

In July, the national median asking rent for properties with 0-2 bedrooms across the 50 largest metropolitan areas was $1,695, reflecting a decrease of $24, or 1.4%, compared to the previous year. This decline represents the 36th consecutive month of annual rent reductions. While the median rent for all unit sizes remains $225, or 15.3%, higher than the levels recorded in July 2019, it is $69, or 3.9%, lower than the peak observed in August 2022.

“Renters have gained meaningful financial breathing room over the last three years, and that advantage is still real in many major metros,” said Jiayi Xu, Senior Economist at Realtor.com. “But the savings gap is no longer moving in just one direction. Starter-home prices are falling faster than rents in many places, giving households who are ready to buy a stronger reason to stay engaged with the market.”

U.S. Rents Decline Across Unit Sizes

In July 2026, the median asking rent for two-bedroom apartments decreased by 1.4% compared to the previous year, representing the 38th consecutive month of annual reductions. Currently, the national median for two-bedroom units stands at $1,893, which is $75 (-3.8%) lower than its peak in July 2022. Despite this widespread decline, rental prices remain elevated compared to pre-pandemic figures. Two-bedroom rents are 17.5% higher than they were in July 2019, while one-bedroom rents have increased by 14.6%, and studio rents have risen by 13.7%.

Further, the average monthly expense for purchasing a starter home across the 50 largest metropolitan areas was $2,553 in July. Nevertheless, trends in home prices, rental rates, and wage growth in several significant markets indicate that a buying opportunity may be approaching. The national rent advantage decreased by $65 compared to the previous year, when the cost of buying was $923 higher per month than renting, as opposed to $858 today. During this time frame, the median rent fell by $24, while the costs associated with purchasing a starter home decreased by $89, which includes a $57 reduction due to lower typical listing prices and a $33 decline attributed to a reduced mortgage rate.

Unit Size	Median Rent	Rent YoY	Consecutive Months of Decline	Total Decline from Peak	Rent Change – 7 Years
Overall	$1,695	-1.4 %	36	-3.9 %	15.3 %
Studio	$1,435	-1.4 %	35	-3.4 %	13.7 %
1-Bedroom	$1,581	-1.3 %	38	-4.8 %	14.6 %
2-Bedroom	$1,893	-1.4 %	38	-3.8 %	17.5 %

To calculate the monthly expense of purchasing a home, we assess the median list price of home listings with 0-2 bedrooms (i.e., starter homes). Given that first-time homebuyers are likely to make lower down payments, we assume a 10% down payment and utilize the 30-year fixed mortgage rate for that month to compute the monthly mortgage payment. Additionally, we factor in HOA fees, taxes, and homeowners insurance, averaged at the metropolitan level, as part of the overall costs. We then juxtapose this buying cost with the median rent in each metro area, concentrating on the disparity between the monthly expenses for each.

The most significant gaps between renting and buying were primarily found in markets that have experienced consistent rent relief over the last few years. Austin, Texas, topped the list: renting a starter home costs $1,378 per month, while purchasing one costs $3,295, resulting in a monthly difference of $1,917 or 139.1%. Renters in Seattle saved $1,961 or 103.8% per month, and those in Los Angeles saved $2,049 or 73.5% per month.

July also reflected an average monthly expense for purchasing a starter home in the 50 largest metropolitan areas was $858, which is 50.6% greater than the cost of renting. In comparison, in July 2025, the cost of buying was $923, or 53.7%, higher than renting. This indicates that the overall benefit of renting has decreased by $65 across these metropolitan areas compared to the previous year.

During the past year, rental costs fell by $24, decreasing from $1,719 to $1,695. Conversely, the cost of acquiring a starter home decreased by $89, from $2,642 to $2,553. This reduction includes a $57 drop attributed to changes in typical listing prices and a $33 decline resulting from a lower mortgage rate, as the 30-year fixed mortgage rate decreased from 6.72% in July 2025 to 6.54% last month.

Top 10 Rent-Favoring Markets Nationwide (July 2026):

Market	Median Asking Rent	Median Buy Cost	$ Difference (Buy-Rent)	% Difference (Buy- Rent)/Rent
Austin-Round Rock-San Marcos, Texas	$1,378	$3,295	$1,917	139.1 %
Seattle-Tacoma-Bellevue, WA	$1,890	$3,851	$1,961	103.8 %
Dallas-Fort Worth-Arlington, Texas	$1,463	$2,657	$1,194	81.6 %
Columbus, Ohio	$1,181	$2,111	$930	78.7 %
Nashville-Davidson–Murfreesboro– Franklin, TN	$1,488	$2,646	$1,158	77.8 %
Los Angeles-Long Beach-Anaheim, CA	$2,787	$4,836	$2,049	73.5 %
San Antonio-New Braunfels, Texas	$1,156	$1,982	$826	71.5 %
Oklahoma City	$915	$1,543	$628	68.6 %
Portland-Vancouver-Hillsboro, OR-WA	$1,606	$2,697	$1,091	67.9 %
San Diego-Chula Vista-Carlsbad, CA	$2,677	$4,365	$1,688	63.1 %

Where are Market Conditions Improving?

While renting may currently be more affordable, the dynamics are changing in areas where the prices of starter homes are decreasing at a faster rate than rents, and where average weekly earnings are increasing at or above the national rate of 3.8%. In July, across the 50 largest metropolitan areas, the median listing price for a starter home dropped by 2.9% year-over-year, in contrast to a 1.4% decrease in rental prices.

Seven metropolitan areas have met both criteria: Oklahoma City; Orlando, Florida; Seattle; Miami; Tampa, Florida; Las Vegas; and Nashville, Tennessee. These locations present varying levels of rental savings at present, yet all are experiencing conditions that are becoming increasingly favorable for potential homebuyers. Orlando is nearing a point of monthly equivalence, where the cost of purchasing a home is only $19 more per month than renting. In the meantime, Oklahoma City, Seattle, and Nashville offer some of the most significant monthly savings from renting, alongside improving conditions for home purchases.

“Improving buying conditions do not make the decision to purchase automatic, especially when renting is still cheaper,” Xu said. “These conditions do give renters more flexibility and confidence when making that decision. Households can continue to save while renting, or, if they are ready to buy, pursue a market where home prices, rents and earnings are increasingly working in their favor.”

U.S. Markets Where Buying Conditions Are Improving:

Market	Median Asking Rent	Median Asking rent, YOY	Median listing price, YOY	Average weekly earning, YOY (June 2026)
Oklahoma City	$915	-1.5 %	-9.0 %	4.1 %
Orlando-Kissimmee- Sanford, FL	$1,682	-1.6 %	-7.7 %	3.8 %
Seattle-Tacoma- Bellevue, WA	$1,890	-1.0 %	-5.9 %	4.0 %
Miami-Fort Lauderdale-West Palm Beach, FL	$2,279	-1.3 %	-5.0 %	5.7 %
Tampa-St. Petersburg- Clearwater, FL	$1,635	-4.9 %	-7.1 %	4.8 %
Las Vegas- Henderson-North Las Vegas, NV	$1,457	-1.8 %	-3.4 %	4.4 %
Nashville-Davidson- Murfreesboro- Franklin, TN	$1,488	-3.9 %	-5.4 %	3.9 %

Note: Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). 

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