It’s cheaper to rent than buy in Nashville, other top metros
NASHVILLE, Tenn. (WKRN) — What does Nashville have in common with Pittsburgh, Richmond, and Detroit? Turns out, in all those metros, it’s cheaper to rent than buy.
In the past year, it has become more economical to rent than buy in America’s 50 largest cities. Music City is no exception.
“The cost to buy a home versus the cost to rent is going to stay higher for a significant amount of time,” said Joel Sanders, founder and CEO of Apartment Insiders in Nashville.
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Sanders admitted that he doesn’t see this trend reversing any time soon: “Even the most optimistic forecasts that I’ve seen show that it’s going to be this way until at least 2029, but a lot of people think it’s going to last even longer than that.”
According to Realtor.com, the average cost of a mortgage on a starter home in Nashville is $2,955, while the median rent in Nashville is $1,589. That means Nashvillians are paying $1,366 more per month for a mortgage than they would for rent.
“Mortgage rates have skyrocketed in the past few years, while rents have, for the most part, maintained their steady growth rate,” said Sanders.
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Nashville’s not alone. In San Jose, it’s $2,780 more a month to buy than rent; in Austin, it’s $2,165 more; and in Denver, it’s $1,312 more.
Even if interest rates start falling, Sanders is not so sure that will make much of a difference: “Say that even happened, the additional issue is that there’s still a shortage of housing in the United States. There’s more demand than there is supply, especially on the single-family side of things.”
The trend of rent being affordable has increased in the past year. Last year it was 45 metros, but now it’s 50.
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