Renting a home in Austin saves you $1,917 a month over buying — and it's not the only metro where renters can save big
Mike CrisolagoSat, September 12, 2026 at 12:45 PM GMT+3 6 min read
Renting often gets a bad rap as a waste of money while you pay off someone else's mortgage.
But as mortgage rates and housing prices keep rising, causing homebuyers to take an average of 15 years to break even compared to renting, many Americans are turning to rentals as a means to build savings.
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"People need to balance smart money decisions with quality of life choices," Todd J. Drowlette, real estate broker, investor and star of A&E's The Real Estate Commission, told Moneywise.
Drowlette added that it's often "smarter to rent over buying a starter home" because buyers may stretch their budgets and have little left for repairs or upgrades. "I often recommend skipping the starter home, saving up and buying the forever home a few years later."
Meanwhile, a recent Realtor.com rental report found that, on average, the cost of renting a zero-to-two bedroom starter home was more affordable than buying one in all of the nation's 50 largest metros.
Austin, Texas came out on top with the biggest monthly percentage difference in savings between buying and renting. The report put median asking rent at $1,378 and median buy cost at $3,295, totaling a monthly savings of $1,917 for renters — or $23,000 annually — followed by several other major markets with rental savings in the thousands.
Renting can save you money — but that advantage may be shrinking
With the median U.S. rent sitting at $1,390, Austin's monthly 139% savings percentage for renters over buyers topped the nation, but it wasn't the highest dollar amount.
West coast markets like Los Angeles/Long Beach/Anaheim ($2,049) and Seattle ($1,961) offered greater savings for renters, but their overall savings percentages were lower than Austin's given the higher overall costs of buying and renting there.
San Diego, meanwhile, saved $1,688 for renters, while the Dallas/Fort Worth/Arlington market hit $1,194 and Nashville notched $1,158.
Reasons for the renter advantage in these markets vary. Texas and Nashville renters, for example, benefit from an oversupply of housing. A weakened job market in Seattle, meanwhile, helped push rents down as people exited the city.
"Instead of putting a significant portion of their savings toward homeownership costs, renters have the flexibility to put those savings toward other personal goals," Blake J. Thomas, vice president of operations at Quinn Residences, which builds single-family rental communities, told Moneywise.
Thomas added that the rental industry is "seeing the continued growth of the 'renters by choice' phenomenon, where individuals and families who are financially capable of buying a home are choosing to rent for the freedom and convenience that comes with it."
Real estate investor Jerry O'Reilly told Moneywise that those conveniences can prove vast beyond the headline monthly savings, including avoiding the time consuming nature of home maintenance, the ability to save on daily transportation if you rent close to work, as well as savings on various local taxes and potential amenity fees that some homeowners pay.
He added that for those with tight budgets who would just scrape by as homeowners, "renting and saving additional cash is the wisest course of action. Borrowing emergency funds to do repairs or replacements decreases any homeownership advantage over renting."
That said, the Realtor.com report did caution that the savings gap for renters over homeowners is slowly closing. And an Apartment List report added that, as August rents rose by 0.1%, "year-over-year rent growth has been inching up and the vacancy rate is inching down, signaling a modest tightening of rental market conditions."
What to consider before deciding whether to buy or rent
Ultimately, the question of whether to buy and build equity or rent and save money has no right answer.
"It's less 'renting is right, buying is wrong' and more 'here's what each option costs you today versus what it builds for you over time,'" Realtor.com Senior Economist Jiayi Xu told Moneywise.
For those trying to decide, Drowlette recommends considering three specific factors: your actual savings when you factor all costs of both rentals and home ownership; whether the landlord will allow you to sign a multi-year lease to keep the rent flat; and the duration of your stay in the area.
"If less than five years," he said of the latter point, "many times the closing costs and real estate agent fees of reselling alone make renting a smarter choice."
Thomas, meanwhile, added that it's important to "decide what lifestyle you want to live" and whether a home purchase or rental works best. For those who chose renting, he suggests determining your needs — be they location or lifestyle related — tour different places that interest you and speak to other residents who live there to get their take on the community.
Xu also pointed to another advantage that renters in many renter-friendly markets currently enjoy: landlords are more open to offering concessions to get a tenant in the door — potentially widening the savings gap even further for renters over buyers.
"Today's renters have real leverage to negotiate with landlords, whether for lower rent or a variety of concessions, such as free rent periods or waived fees," Xu said. "In other words, renters have more options than ever to find a space that truly fits their needs and often at a lower price."
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This article originally appeared on Moneywise.com under the title: Renting a home in Austin saves you $1,917 a month over buying — and it's not the only metro where renters can save big
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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