Renting just got a lot cheaper than buying

The monthly cost of buying a typical home now exceeds the typical asking rent by about $570, up from roughly $370 a year ago.

The numbers

At last week’s 30-year rate of 6.95%, a buyer putting 20% down on a median-priced existing home of $429,100 would pay about $2,272 a month in principal and interest. A year ago, at 6.26% and a slightly lower price, it was about $2,083.

Rents moved the other way. Realtor.com’s median asking rent in August was $1,699, down 0.9% from a year earlier, the 37th straight month of annual declines. Nearly half of rental listings, 43.5%, offered concessions.

The buying figures exclude taxes, insurance and maintenance, which widen the gap further. The median rental is also usually smaller than the median home, so this is a rough comparison, not a like-for-like one.

Our read

For households that can rent, waiting is getting cheaper relative to buying. That keeps first-time demand thin and leaves sellers, not landlords, carrying more of the adjustment. It also means a drop in mortgage rates would bring buyers back quickly.