The decision to rent or buy a home has always been a complex financial and personal choice but in 2025, it’s more dependent on location than ever. According to a new study by First American Financial Corporation, analyzed by Deputy Chief Economist Odeta Kushi, the cost-benefit breakdown of renting versus buying varies drastically by metro area.
So, what does that mean for you in today’s high-cost housing market? Let’s break it down.
What the Study Looked At
Kushi and her team at First American analyzed the top 50 metropolitan areas in the U.S., comparing the total cost of homeownership (including mortgage, property taxes, insurance, and maintenance) to median rent prices in each city. Then, they factored in expected home price appreciation over the next 12 months to determine the “net cost of ownership” in other words, the monthly cost of owning after accounting for building equity.
Key Findings at a Glance
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Renting is financially better in 36 out of 50 metros (72% of markets).
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Buying still wins in 14 metros, where equity growth outweighs high monthly ownership costs.
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Local conditions and expected appreciation make a major difference in the math.
Where Buying Still Makes Sense
While it may seem like renting is the go-to in most places, there are several cities where buying still offers better long-term value especially in the Midwest and parts of the East Coast. Here are the top 10 metros where owning beats renting:
| Metro Area | Net Monthly Savings (Ownership vs. Rent) |
|---|---|
| Louisville, KY | +$503 |
| Hartford, CT | +$473 |
| Buffalo, NY | +$465 |
| Pittsburgh, PA | +$435 |
| Milwaukee, WI | +$405 |
| Detroit, MI | +$350 |
| Cleveland, OH | +$348 |
| Philadelphia, PA | +$324 |
| Richmond, VA | +$268 |
| Baltimore, MD | +$219 |
These cities offer a rare combo: reasonable home prices, moderate mortgage payments, and expected appreciation that makes ownership a good investment over time.
Example: In Baltimore, the total monthly cost of owning is about $2,355, but when you factor in projected price appreciation (4.1%), the net cost drops to $1,440 which is less than the median rent of $1,660.
Where Renting Remains King
In most major metro areas especially on the coasts renting is still significantly more affordable than owning. A sharp example of this is San Francisco, where the cost of owning far outweighs the cost of renting:
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Ownership cost: ~$6,305/month
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Expected depreciation: -6% (negative appreciation)
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Net ownership cost: ~$10,000/month
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Median rent: ~$2,500/month
In this case, homeowners are paying four times more each month than renters and losing equity in a declining market.
What Factors Are Driving These Differences?
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Mortgage Rates
While mortgage rates have pulled back slightly from their 2023–2024 peaks, they remain relatively high. This inflates monthly ownership costs and makes entry more difficult for new buyers. -
Home Price Appreciation
In markets where home prices are expected to rise steadily, the potential return on investment through equity makes buying more attractive. -
Rent Trends
In some cities, rents are stabilizing or even declining slightly, which adds to the appeal of renting in the short term. -
Local Market Conditions
Each metro has its own economic fundamentals job growth, housing supply, affordability metrics that shape its real estate dynamics.
Rent or Buy? What Should You Do?
There’s no universal answer but here are a few questions to ask yourself:
How long do you plan to stay?
If you’re putting down roots for 5+ years, buying may offer long-term value. If not, renting offers flexibility.
Can you afford the upfront costs of buying?
Buying typically requires a 3–20% down payment, closing costs, and ongoing maintenance expenses.
Is your city on the “ownership advantage” list?
If you’re in a place like Louisville, Buffalo, or Cleveland run the numbers. You might come out ahead as a homeowner.
How is your local market expected to perform?
Talk to a real estate expert in your area. Expected appreciation makes a huge difference in ownership value.
Final Thoughts
The 2025 housing market is defined by nuance. Blanket advice no longer applies. In some markets, buying a home builds wealth and saves money. In others, it’s smarter to rent, wait, and watch the market shift.
Before making any decisions, evaluate your personal finances, local market dynamics, and lifestyle priorities. As First American’s Odeta Kushi points out, “Homeownership is as much a lifestyle decision as it is a financial one.”
Source: MPA Magazine – Rent or Buy in 2025? It Depends on Where You Live, Says First American Economist