In more than half of the 50 biggest metros in the U.S., including Pittsburgh, buying a starter home is more affordable than renting.
According to Realtor.com’s® Monthly Rental Report, the fees associated with buying a home are cheaper than renting costs in 52% of areas studied. In January, the national median rental price grew 19.8% compared to January 2021, the eighth consecutive month of double-digit year over year gains. Studios rose 21% ($256 on average), one-bedrooms were up 19.2% ($266 on average) and two-bedrooms were up 19.2% ($323 on average). Home prices are also increasing, but at a slower rate. The report found that home prices of two-bedroom properties increased 11% year over year nationally.
As long as buyers focus on starter homes, they are looking at more affordable options generally. The report found that starter homes, on average, were listed for $295,360, nearly $80,000 below the national median of $375,000. However, adding in mortgage fees and other starter costs, the average monthly home payment ($1,867) was marginally more than rent payments ($1,789), but that is across the U.S. In 52% of markets though, buying a starter home was 20.6%, or $323 on average, cheaper than renting.
In Pittsburgh, buying a starter home was 38.3% cheaper than renting, or $585 on average. The report found that, on average, buyers who purchased starter homes spent about $945 per month on their housing costs, compared to renters, who spent $1,530 on average. Year over year, homes have increased 3.2% in Pittsburgh, but rents have grown 18.6%. Pittsburgh was third on the list of places where buying a starter home was more affordable than renting, behind just Birmingham and Cleveland.