There's Only One US City Where Starter Homes Are Cheaper Than Rent—'Homeowners Are Enjoying The Return On Their Investment In A Home'
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For most Americans, buying a starter home costs a lot more than renting. But there's one exception—Pittsburgh.
Pittsburgh Bucks The National Trend
According to Realtor.com's June Rental Report, Pittsburgh is the only major metro area in the U.S. where it's actually cheaper to buy a starter home than to rent one. The typical monthly cost of buying a home in Pittsburgh was $1,362 in June, while renting a similar zero- to two-bedroom unit costs $1,473, a $111 monthly savings for homeowners.
“Pittsburgh remains one of the most affordable places in the U.S. to live and to buy a home,” Realtor.com Senior Economic Research Analyst Hannah Jones said. “It’s the only major market where buying a home is cheaper than renting, and one of just three large metros where a median-income household can afford a median-priced home.”
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In the other 49 of the 50 largest metro areas, renting still comes out ahead. Nationally, the average cost of buying a starter home is $908 more per month than renting, according to Realtor.com.
Why Pittsburgh Is Different
Pittsburgh didn't go through the same kind of housing boom as many other cities during the pandemic, which helped keep prices stable. The city also has an older housing stock, with the median home built in 1961, two decades older than the national average. This often means homes need some renovation, but are listed at lower prices.
“It avoided the housing boom cycle during the pandemic and was able to maintain its stability,” Realtor.com Economist Jiayi Xu told Newsweek. “It is one of just three major U.S. metros where a typical household can afford a home while spending less than 30% of its annual income.”
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David Dean, the incoming president of the Pennsylvania Association of Realtors, emphasized Pittsburgh's consistency. “The Pittsburgh market has continued to be a steady real estate market throughout history. Throughout the pandemic, Pittsburgh was incredibly resilient,” Dean told Newsweek.
Affordability Holds Despite Rising Prices
Even though prices in Pittsburgh have crept up, Redfin data showed a 6.9% year-over-year increase in June, with the median sale price at $270,000, experts say the city is likely to stay affordable.
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