The debate between renting and owning a home has been ongoing for decades, with financial and lifestyle factors influencing the decision. However, as the housing market evolves, so does the cost dynamic between these two options.
In 2025, the financial scales have tipped even more in favor of renting over homeownership, especially in large metropolitan areas. According to a recent LendingTree analysis, renting is now the more affordable option in all of the 100 largest U.S. cities.
This shift is primarily due to high mortgage rates, elevated home prices, and changing market conditions. But does this mean buying a home is no longer a good investment? Let’s break down the latest numbers and trends.
Source: LiveNowFox
National Cost Comparison: Renting vs. Owning in 2025
How Much Does Renting Cost in 2025?
According to the latest data, the median monthly rent across the U.S. is currently $1,406. This amount varies widely based on location, property type, and demand. While rents have increased over the past few years, the rate of growth has stabilized compared to the dramatic spikes seen in 2021 and 2022.
How Much Does Homeownership Cost?
For homeowners with a mortgage, the median monthly cost in 2025 is $1,904, which is significantly higher than renting. This figure includes mortgage payments, property taxes, homeowners insurance, and other expenses.
The key takeaway? On average, renters save approximately $498 per month compared to homeowners—a notable increase from the $475 monthly difference reported in 2022.
Why is Renting More Affordable Than Owning?
Several factors are contributing to the growing cost disparity between renting and homeownership:
- High Mortgage Rates: The average 30-year fixed mortgage rate remains close to 7%, making monthly mortgage payments substantially more expensive.
- Soaring Home Prices: Despite some cooling in the real estate market, the median home price in many areas remains above $400,000, keeping homeownership out of reach for many.
- Ongoing Property Maintenance Costs: Unlike renters, homeowners must also cover expenses like repairs, homeowners association (HOA) fees, and property maintenance.
These financial burdens make renting the more practical option for many, especially those who value flexibility.
Top Cities Where Renting Saves the Most Money
The cost gap between renting and owning varies significantly based on location. In some of the most expensive housing markets, renting can save tenants over $1,000 per month.
Cities with the Largest Cost Gaps (Renting vs. Owning)
Here are the top three metropolitan areas where renting provides the greatest savings:
- San Francisco, CA: Renters save approximately $1,414 per month compared to homeowners.
- Bridgeport, CT: The cost difference favors renters by about $1,367 per month.
- New York, NY: Renting is about $1,340 cheaper per month than owning.
These cities have some of the highest real estate prices in the country, making homeownership extremely expensive. High property taxes, strict zoning laws, and limited housing inventory further drive up costs.
Top Cities Where Renting vs. Owning Costs are Closest
Although renting remains the cheaper option nationwide, some cities have a much smaller difference between renting and owning.
Cities with the Smallest Cost Gaps
- Phoenix, AZ: Renting costs only $90 less per month than owning.
- Orlando, FL: Renters save about $127 monthly compared to homeowners.
- Palm Bay, FL: The monthly savings for renters is around $128.
In these locations, the cost of homeownership is relatively close to renting. For buyers who can afford a down payment and qualify for a low-interest mortgage, purchasing a home may still be an attractive long-term investment.
Key Factors Influencing the Rent vs. Buy Decision in 2025
While renting appears to be the better financial choice in most cases, it’s essential to look at the big picture. Here are some critical factors to consider before deciding whether to rent or buy:
1. Mortgage Interest Rates
Mortgage rates play a massive role in the affordability of homeownership. In 2025, rates remain near 7%, making home loans more expensive compared to previous years.
A lower mortgage rate (e.g., below 5%) would make homeownership more competitive with renting, but in the current environment, higher borrowing costs favor renters.
2. Home Prices and Market Conditions
Despite some cooling in the market, home prices remain high, particularly in major cities. If prices drop significantly in the future, homeownership could become more affordable again.
3. Rent Stability vs. Home Equity
Renters benefit from predictable monthly payments without the risk of declining property values. However, homeowners build equity over time, which can lead to long-term financial gains.
4. Lifestyle and Career Flexibility
Renting provides greater mobility, making it ideal for people who:
- Move frequently for work.
- Want to avoid maintenance responsibilities.
- Prefer short-term flexibility.
Buying is better for those who:
- Plan to stay in one location for 5+ years.
- Want to build wealth through home equity.
- Can afford the upfront costs (down payment, closing fees, repairs).
Is Buying a Home Still a Good Investment?
Despite the current financial advantage of renting, buying a home can still be a wise long-term investment under the right conditions.
Equity Growth: Unlike renting, homeowners build equity in their property, which can lead to substantial financial gains over time.
Fixed Housing Costs: Unlike rent, which can increase annually, a fixed-rate mortgage locks in a predictable monthly payment.
Tax Benefits: Homeowners may qualify for mortgage interest deductions and other tax advantages that renters do not receive.
However, these benefits only apply if homeowners stay in the same home for several years and can afford the initial costs (e.g., down payment, closing costs, maintenance).
Final Thoughts: Should You Rent or Buy in 2025?
The decision to rent or own depends on your financial situation, lifestyle preferences, and long-term goals.
Renting makes sense if you want lower monthly costs, flexibility, and minimal financial risk.
Buying is worthwhile if you plan to stay in the same home for years and can afford the upfront costs.
For now, with mortgage rates still high and home prices elevated, renting remains the more affordable choice in nearly all U.S. cities. But if interest rates decrease or housing prices drop, the owning vs. renting equation could shift again.
Read the full report here: LiveNowFox: Renting vs. Owning Cost Comparison 2025