3 U.S. Cities Where You Should Buy a Home, and 5 Where You're Better off Renting

The current housing market is challenging, to say the least. With some home prices higher than they've ever been, you may have given up on your dream of homeownership altogether.

However, according to a recent report from Realtor.com, it's actually cheaper to buy than to rent in several key U.S. cities.

If you've been struggling to find ways to make your monthly payment, it might be helpful to understand whether or not it's better to buy or rent in your area. Here are five cities where you're better off buying, followed by five where you should consider renting.

Median cost to buy: $1,263/mo.

Median cost to rent: $1,269/mo.

Another market it where it makes more sense to buy is Birmingham. Although the different is slight, the monthly payment after buying a home in the Alabama area is still lower than the median rent.

Median cost to buy: $1,490/mo.

Median cost to rent: $1,529/mo.

In Pittsburgh, individuals could save some money each month if they decided to buy instead of rent, with the median monthly cost to own a home being $1,490.

Median cost to buy: $1,258/mo.

Median cost to rent: $1,328/mo.

Per the most recent Realtor.com data, Memphis residents could see monthly savings from buying a house instead of renting it. In fact, according to Redfin data, home prices have come down 15% compared to the same time last year. 

Pro tip: You can potentially keep more money in your bank account if you're willing to relocate to a financially advantageous city.

Median cost to buy: $3,946/mo.

Median cost to rent: $1,670/mo.

The most expensive city to buy instead of rent isn't on the East Coast or Pacific Northwest: It's in the heart of Texas. 

In 2022, Austin was ranked as the second fastest-growing U.S. city, and the ever-increasing demand for housing definitely makes itself clear in Austin's median housing prices. In contrast, Austin's rent costs saw a large drop — exactly 8% since last year.

Pro tip: You can avoid the foolish mistakes of many who buy in this city if you just pay attention to the rates over time. The popularity of the city with the people who like buying continues to drive costs up.

Median cost to buy: $5,859/mo.

Median cost to rent: $2,906/mo.

It's been impossible for all but the richest (or the most willing to be house-poor) to buy a house in San Francisco for the last several decades. 

Even a single-family home can cost three-quarters of a million dollars. Renting in the area isn't exactly affordable: At almost $3,000 a month, San Francisco's rent is one of the most expensive on our list, but buying a house is nearly twice as expensive.

Median cost to buy: $2,458/mo.

Median cost to rent: $1,222/mo.

Although rent has gone up in Columbus over the last year, housing prices have, too. Residents can save a significant amount of money each month if they choose to rent instead of buying a home. 

Another bonus? The cost of living is much lower in the area compared to other metro areas in the country. This means you'll have even more ways to keep money in your bank account.

Median cost to buy: $3,779/mo.

Median cost to rent: $1,898/mo.

Another California city where homeownership is incredibly costly is Sacramento. Home prices have grown 9% over the last year, which is why more individuals are considering renting. 

This does mean, though, that the rental market is competitive, so you'll likely need to act quickly if you see a good deal.

Median cost to buy: $5,672/mo.

Median cost to rent: $2,892/mo.

With almost 13 million people living within city boundaries, Los Angeles is definitely one of the most densely populated areas in the U.S. The high population and high demand for housing help keep housing costs high for renters and buyers alike, with the median home price now at a sky-high $1.16 million.

To save some money, residents should consider renting where they can expect to spend a median of $2,892 per month on rent.

Whether you rent or own, you'll almost always have to funnel extra cash from side gigs or other means into housing: It'll probably be your biggest monthly expense for the foreseeable future.

However, renting isn't always the cheapest option, and buying isn't always the most expensive. The cheaper choice depends in large part on where you live, so if you'd rather rent than buy (or vice versa), comparing the data can help you decide where — and how — you actually want to put down roots.