Is it more affordable to rent or to pay a mortgage?

Renting is currently the cheaper option in all 100 of the largest U.S. cities examined in a new LendingTree analysis, including New York, Los Angeles, Chicago, Houston and Phoenix. The study found a noticeable difference in typical monthly costs between renting and owning, leading to substantial savings for renters. 

LendingTree’s study discovered that, on average, renters in major U.S. cities pay about 37% less than homeowners in the same markets. The median monthly gross rent in the U.S. was $1,487 in 2024, compared to $2,035 for median mortgage costs.

That makes the median monthly difference between renting and owning a home $548 per month or $6,576 annually. 

“At this time, renting is definitely a route that is becoming more and more palatable for many Americans,” Merrick Lackner, co-founder and CEO of smart home technology company Rently, told ABC News. “The savings over the course of the year are significant.”

Renters save more than $16,900 per year in some cities

Among the 100 largest cities in the U.S., San Francisco had the largest cost difference between renting and owning, per LendingTree. There, the monthly gap between the two methods of living was $1,565. Bridgeport, Connecticut, had the second-largest difference, with a gap of $1,427, while New York followed with a gap of $1,409. In each of these cities, renters save at least $16,900 per year when compared to homeowners. 

Elsewhere in 22 of the 100 largest metropolitan areas in the U.S., homeowners pay at least 50% more per month than renters, according to LendingTree. 

Lackner notes that renting in areas like San Francisco could save a renter thousands of dollars every year, which, over time, “could serve as the base” for a down payment on a house.  

Benefits of renting

A separate study published earlier this week by the National Association of Realtors found that home prices increased in 73% of American metro areas during the fourth quarter of 2025. The median price for a single-family home grew 1.2% year-over-year to $414,900, per the study. 

“We’re in unprecedented history here,” Lackner told ABC News. “Homeownership is costing a lot more.”

For people living in or moving to large American cities, the LendingTree study suggests that renting may be the more affordable option. Households focused on controlling monthly expenses or building savings may find that renting leaves more money free each month than buying at today’s prices, Lackner said. 

Pros of homeownership

The LendingTree analysis focuses on monthly expenses, not long-term wealth building. Homeownership offers benefits like building equity over time and protection against future rent increases. 

It might be cheaper in the short-term to rent, but it’s important to note that most Americans can write off interest and real estate taxes on their mortgage loan. Federal tax reductions should factor into what you’re actually paying for the year.

Also, homeownership represents more than just money — it’s an accomplishment.

“The choice isn’t just about money,” Matt Schulz, LendingTree’s chief consumer finance analyst, said in a statement. “Homebuying can represent accomplishment, security, safety and plenty of other things. There’s a reason why homeownership has long been considered part of the American Dream.”

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