It’s cheaper to rent than buy a home in San Antonio (barely), but not the case for Houston

Redfin data shows Houston is one of four major U.S. Metro areas where it’s cheaper to buy than to rent

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If you’re in the market to move, you may be wondering if it’s cheaper to buy or rent a home in San Antonio.

According to Redfin, it’s cheaper to rent — but not by much.

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There are only four cities in the United States right now where buying yields a less expensive monthly payment than renting, and Houston is one of them.

Cities where it’s cheaper to buy than rent:

  • Detroit- 24% less to buy than rent
  • Philadelphia - 7% less to buy than rent
  • Cleveland - 4% less to buy than rent
  • Houston - 1% less to buy than rent

In San Antonio, buying a home right now would cost, on average, about 5% more than renting — not a huge difference.

According to Redfin data, the estimated median monthly mortgage cost for a home purchased in current conditions in San Antonio is $2,188 compared to $2,086 for the median rent.

About 38% of properties for sale in San Antonio have lower estimated monthly mortgage costs than the current median rent costs.

Compare that to the city with the biggest mortgage-to-rent discrepancy — San Jose, CA, where the typical home is 165% more expensive to buy than rent. The median estimated monthly mortgage payment for homebuyers is $11,049, compared with an estimated monthly rent of $4,176.

Redfin says in the California cities of San Jose, San Francisco, Oakland, Anaheim and Seattle, Washington, there are NO homes that are cheaper to buy than to rent.

And that’s virtually the case for 19 of the 50 most populous U.S. metros — including Austin.

Data from Redfin shows the comparison of mortgage to rent costs as of March 2023. (Redfin)

Of course, there are other factors to consider outside the monthly payment.

“Buying a home often makes more financial sense than renting if you can afford a down payment and monthly mortgage because you’re building equity. When you own your home, your home pays you; when you rent, you and your home pay your landlord,” said Redfin Deputy Chief Economist Taylor Marr. “But buying isn’t a feasible option for everyone. Some people move around a lot, so renting might make more sense because they won’t be in their home long enough to build equity. Many others simply don’t have the money for a down payment—a situation that has become increasingly common due to rising mortgage rates and elevated home prices.”

Redfin estimated monthly housing payments using the Redfin Estimate of the homes’ value in March and a 6.5% mortgage interest rate — the average rate in March.

Monthly rents were calculated on those same homes using the Redfin Rental Estimate.

Redfin said mortgage rates would have to fall significantly for owning to become cheaper than renting across most markets in the U.S.

“If the 30-year-fixed mortgage rate dropped to 5%, the median estimated monthly mortgage payment for homebuyers would be $2,993, or 10% higher than the $2,716 estimated monthly rent. That’s significantly lower than today’s 25% homeownership premium,” Redfin stated in their report.

“If rates dipped to 4%, the estimated premium would shrink to 1%. And if they fell back down to 3%, it would actually be 7% cheaper to rent.”

But, Redfin noted — if mortgage rates fall, rents could come down as well.

And a 3% mortgage rate is unlikely to happen anytime soon.

“I wouldn’t encourage people to squeeze their budgets in order to buy a home when prices are falling and we’re teetering on a recession,” Marr said. “In the years leading up to the pandemic, it made sense for some homebuyers to break the rule that says not to spend more than 30% of your income on monthly housing costs, but these times are more risky, so it makes sense to be a little more conservative.”

About the Author

Julie Moreno has worked in local television news for more than 25 years. She came to KSAT as a news producer in 2000. After producing thousands of newscasts, she transitioned to the digital team in 2015. She writes on a wide variety of topics from breaking news to trending stories and manages KSAT’s daily digital content strategy.

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