Detroit, Philadelphia, Cleveland, and Houston. Those are the only four remaining cities where it costs less to buy a typical home than to rent, according to a new report from Redfin. The analysis compared March home values and rental estimates assuming a 5% downpayment and a 6.5% mortgage rate for the 50 most populous metro areas in the United States. Back in January 2022, an analysis from Realtor.com showed that buying a home was more affordable than renting in more than half of the largest metros. But mortgage rates have increased since then while rent prices have flattened nationally.
Naturally, the question for investors is whether buying a home can yield cash flow now that housing payments (including insurance and property taxes) exceed fair market rent in most markets. Spoiler: The long-term rental strategy is still viable—but investors face more challenges.
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