AUSTIN, Texas — New data on the Austin housing market shows Austin tops the list of markets that favor renting over buying a home.
According to Realtor.com's August rental report, renting in Austin is less expensive than buying a starter home. In Austin, the higher concentration of tech workers and high earners means the average rent cost and buy cost are higher than the national average.
In Austin, the monthly cost of buying a starter home was almost $4,000 – more than 130% higher than the monthly rent of $1,600.
The report said the monthly cost of purchasing a home rose by 9.2% from this time last year, but rents dropped a whopping 8%.
It said the Austin housing market has cooled recently, with prices now about 2% below where they were in August 2022. But the modest price declines are nothing compared with the impact of higher mortgage rates on the average monthly payment.
To calculate the data, Realtor.com used the August 2023 median rental prices for studio, one-bed and two-bed homes, weighted by the number of listings in each metropolitan housing market, and compared that with the monthly buying costs of a median-priced home, assuming a 7% down payment with a mortgage rate of 7.07% and including all fees and taxes. Only the 50 largest metro areas were included in the analysis.
The top 10 metros where renters save the most money are:
- Austin
- San Francisco, California
- Columbus, Ohio
- Sacramento, California
- Los Angeles
- San Jose, California
- Portland, Oregon
- Boston
- Seattle
- Phoenix
Meanwhile, the three markets where buying can save the most money each month are:
- Memphis, Tennessee
- Pittsburgh
- Birmingham, Alabama
The full report can be found on the Realtor.com website.
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