For first-time buyers, the rent-or-own question has become harder to answer in recent years.
Home prices have stayed high in many markets, and mortgage rates remain well above their early-2020s lows.
But the rent-versus-buy math usually leaves something out. Rent buys flexibility and shields renters from many repair costs, but it doesn’t build home equity.
A mortgage payment works differently: interest, taxes, and insurance are costs, just like rent, while the principal portion chips away at the loan balance. Add any gain in the home’s value, and ownership can build equity through appreciation too.
Once you factor equity in, the rent vs. buy comparison changes. To find out where that equity-building gives buyers the greatest financial advantage compared to renting, Lower analyzed for-sale and city-level appreciation data from Movoto, a real estate search platform and Lower company.
The study focused on housing markets where home prices fall within Federal Housing Administration (FHA) loan limits, which are designed to make homeownership more accessible to first-time buyers with lower down payments and flexible credit requirements.
The final analysis includes 136 markets where home prices, rents, and appreciation data could be reliably compared.
Lower compared rents against the estimated monthly cost of owning with an FHA loan. That cost included principal, interest, property taxes, homeowners insurance, and the FHA mortgage insurance premium (MIP), which is a standard fee for FHA borrowers.
The rent figures used throughout this study are HUD (U.S. Department of Housing and Urban Development) Small Area Fair Market Rents for 3-bedroom units, measured at the zip code level. These annually published rent figures represent the 40th percentile of gross rents for standard-quality units, which are modest, non-luxury rentals. The study used zip-level data to give each city its own rent benchmark rather than a broad metro-wide average.
Why City-Specific Appreciation Matters
This analysis uses annualized listing-price changes from Movoto market data for 2023 to 2026 to reflect recent market performance. The tables break out equity from home price growth separately from equity built through monthly payments, making it easier to see what’s guaranteed versus what depends on the market.
|
56 / 136
cities where buying beats renting (41%)
|
1.6%
avg city appreciation (vs 4% blanket)
|
34
cities with negative appreciation
|
National Rankings
Top 25 Cities: Owning vs. Renting (3-Bedroom)
Lower identified the 25 cities across the United States where buying shows the largest monthly edge over renting once equity is counted, focusing on places where homeownership is within reach for first-time buyers.
Monthly Difference = Median Rent (3BR) minus the estimated equity-adjusted monthly cost of owning, after crediting monthly equity built (principal paydown plus recent city-specific listing-price appreciation). Cities are ranked descending by monthly difference.
Buyers still pay the full mortgage amount each month. The net cost figure is an equity-adjusted estimate, not a cash-flow payment.
|
#
|
City
|
ST
|
Rgn
|
Mortgage
|
Rent
|
Appreciation
|
Principal
|
Equity from Appreciation
|
Total Equity
|
Net Cost of Owning
|
Monthly Difference
|
|
1
|
Hartford
|
CT
|
Northeast
|
$4,374
|
$2,130
|
+11.1%
|
$448
|
$4,764
|
$5,212
|
-$838
|
+$2,968/mo
|
|
2
|
Worcester
|
MA
|
Northeast
|
$3,832
|
$2,710
|
+5.8%
|
$421
|
$2,341
|
$2,762
|
$1,070
|
+$1,640/mo
|
|
3
|
Cleveland
|
OH
|
Midwest
|
$1,625
|
$1,450
|
+8.6%
|
$159
|
$1,314
|
$1,473
|
$152
|
+$1,298/mo
|
|
4
|
Dayton
|
OH
|
Midwest
|
$1,922
|
$1,560
|
+7.0%
|
$196
|
$1,316
|
$1,512
|
$410
|
+$1,150/mo
|
|
5
|
Noblesville
|
IN
|
Midwest
|
$3,815
|
$2,150
|
+5.8%
|
$424
|
$2,356
|
$2,780
|
$1,035
|
+$1,115/mo
|
|
6
|
Newport News
|
VA
|
South
|
$2,561
|
$2,400
|
+3.8%
|
$273
|
$995
|
$1,268
|
$1,293
|
+$1,107/mo
|
|
7
|
New Rochelle
|
NY
|
Northeast
|
$4,261
|
$3,685
|
+2.7%
|
$466
|
$1,208
|
$1,674
|
$2,586
|
+$1,099/mo
|
|
8
|
Milwaukee
|
WI
|
Midwest
|
$2,143
|
$1,570
|
+6.8%
|
$216
|
$1,410
|
$1,626
|
$517
|
+$1,053/mo
|
|
9
|
Rochester
|
MN
|
Midwest
|
$3,738
|
$2,000
|
+6.0%
|
$408
|
$2,348
|
$2,756
|
$982
|
+$1,018/mo
|
|
10
|
Baltimore
|
MD
|
South
|
$2,324
|
$2,380
|
+3.1%
|
$235
|
$699
|
$934
|
$1,390
|
+$990/mo
|
|
11
|
Detroit
|
MI
|
Midwest
|
$1,755
|
$1,480
|
+7.7%
|
$144
|
$1,065
|
$1,209
|
$546
|
+$934/mo
|
|
12
|
Akron
|
OH
|
Midwest
|
$1,771
|
$1,430
|
+6.2%
|
$179
|
$1,061
|
$1,240
|
$532
|
+$898/mo
|
|
13
|
Montgomery
|
AL
|
South
|
$2,160
|
$1,275
|
+6.7%
|
$237
|
$1,525
|
$1,762
|
$398
|
+$877/mo
|
|
14
|
Nashua
|
NH
|
Northeast
|
$4,120
|
$2,970
|
+3.6%
|
$445
|
$1,536
|
$1,981
|
$2,139
|
+$831/mo
|
|
15
|
Kenosha
|
WI
|
Midwest
|
$2,688
|
$1,890
|
+4.8%
|
$288
|
$1,327
|
$1,615
|
$1,072
|
+$818/mo
|
|
16
|
New Haven
|
CT
|
Northeast
|
$4,427
|
$2,520
|
+5.2%
|
$444
|
$2,215
|
$2,659
|
$1,768
|
+$752/mo
|
|
17
|
Columbus
|
GA
|
South
|
$2,482
|
$1,320
|
+6.3%
|
$271
|
$1,634
|
$1,905
|
$578
|
+$742/mo
|
|
18
|
Menifee
|
CA
|
West
|
$3,786
|
$3,810
|
+0.6%
|
$433
|
$249
|
$682
|
$3,105
|
+$705/mo
|
|
19
|
Jackson
|
MS
|
South
|
$1,543
|
$1,380
|
+5.9%
|
$130
|
$735
|
$865
|
$678
|
+$702/mo
|
|
20
|
Lansing
|
MI
|
Midwest
|
$1,504
|
$1,625
|
+2.8%
|
$135
|
$363
|
$498
|
$1,006
|
+$619/mo
|
|
21
|
Springdale
|
AR
|
South
|
$4,134
|
$1,850
|
+5.4%
|
$462
|
$2,391
|
$2,853
|
$1,281
|
+$569/mo
|
|
22
|
Manchester
|
NH
|
Northeast
|
$3,868
|
$2,550
|
+3.6%
|
$420
|
$1,449
|
$1,869
|
$1,999
|
+$551/mo
|
|
23
|
Westland
|
MI
|
Midwest
|
$2,025
|
$1,685
|
+3.6%
|
$198
|
$684
|
$882
|
$1,143
|
+$542/mo
|
|
24
|
Lancaster
|
CA
|
West
|
$2,505
|
$2,650
|
+0.4%
|
$268
|
$103
|
$371
|
$2,135
|
+$515/mo
|
|
25
|
Fargo
|
ND
|
Midwest
|
$3,052
|
$1,450
|
+5.6%
|
$325
|
$1,745
|
$2,070
|
$982
|
+$468/mo
|
*5% down, 6.52% rate. Rent = HUD 3-bedroom zip-level Fair Market Rent. Appreciation = annualized 2023–2026 (Movoto).
How the Math Works: Hartford, CT
Hartford leads with 11.1% annualized appreciation. Strong price growth in a market with tight housing supply, which intensified competition among buyers pushed appreciation higher over the period studied, but that trend may not reflect long-term or typical market conditions.
Just because Hartford took our top spot doesn’t necessarily mean it’s the best market for first-time homebuyers. Other markets where homeownership pays off, like Dayton or Cleveland, might have more opportunity for first-time homebuyers since they don’t depend on such rapid appreciation.
|
Figure
|
Explanation
|
Result
|
|
Median Rent
|
Figures are from the Department of Housing and Urban Development’s Small Area Fair Market Rent (SAFMR) for a 3-bedroom apartment.
|
$2,130
|
|
Estimated monthly mortgage
|
Includes principal, interest, taxes, and insurance, as well as FHA mortgage insurance cost. Rates are based on 6.52% against the market’s median listing price.
|
$4,374
|
|
First month principal
|
The amount of principal paid down in the first month of a mortgage based on the estimated monthly mortgage at a 6.52% rate.
|
$448
|
|
Median listing price
|
Based on listing data from Movoto.
|
$514,996.58
|
|
Appreciation rate
|
City-wide home appreciation rate, annualized between 2023 and 2026.
|
+11.1%
|
|
Monthly home appreciation
|
Calculated by applying the annualized appreciation rate to the median listing price and dividing by 12.
|
$514,996.58 x 11.1% = $57,164.62 per year, divided by 12 = $4,764 per month
|
|
Total equity
|
Total monthly equity built, calculated by adding the monthly appreciation and the first month’s principal.
|
Principal payment + monthly appreciation = $5,212
|
|
Net cost of owning
|
The net cost of owning, calculated by subtracting the total equity built from the monthly mortgage payment. Note that Hartford is unusual here, because the net cost of owning is actually negative.
|
Mortgage payment of $4,374 - monthly equity of $5,212 = -$838 / month
|
|
Difference
|
Calculated by subtracting the net cost of owning from the median rent.
|
+$2,968/mo
|
Top 5 Cities by Region
WEST: TOP 5
The West has the lowest share of markets where buying has the advantage over renting of any region at just 26%.
In most Western markets, appreciation from 2023 to 2026 was modest. The study’s average across cities in the Western United States was well below the national study average, which limits how much the appreciation component offsets mortgage costs.
The West region's top two cities, Menifee, CA (+$705/mo) and Lancaster, CA (+$515/mo), succeed largely because their median rents are relatively high against more affordable home prices.
The regional advantage narrows quickly after the top five. Only one additional Western city remained above break-even.
|
#
|
City
|
ST
|
Est. Monthly Mortgage
|
Median Rent (3BR)
|
Appreciation Rate
|
Principal Paydown
|
Monthly Appreciation
|
Monthly Equity Built
|
Net Cost of Owning
|
Monthly Difference
|
|
1
|
Menifee
|
CA
|
$3,786
|
$3,810
|
+0.6%
|
$433
|
$249
|
$682
|
$3,105
|
+$705/mo
|
|
2
|
Lancaster
|
CA
|
$2,505
|
$2,650
|
+0.4%
|
$268
|
$103
|
$371
|
$2,135
|
+$515/mo
|
|
3
|
San Bernardino
|
CA
|
$3,740
|
$2,780
|
+2.0%
|
$433
|
$830
|
$1,263
|
$2,477
|
+$303/mo
|
|
4
|
Surprise
|
AZ
|
$3,538
|
$3,130
|
+0.4%
|
$419
|
$161
|
$580
|
$2,959
|
+$171/mo
|
|
5
|
North Las Vegas
|
NV
|
$3,119
|
$2,500
|
+0.9%
|
$374
|
$323
|
$697
|
$2,422
|
+$78/mo
|
*5% down, 6.52% rate. Rent = HUD 3-bedroom zip-level Fair Market Rent. Appreciation = annualized 2023–2026 (Movoto).
SOUTH: TOP 5
The South is the most represented region in the study with 74 cities, 22 of which (30%) favor buying after factoring in equity.
Newport News, VA leads the South at +$1,107/mo, powered by a 3.8% appreciation rate and a median rent that runs close to the gross mortgage.
Maryland’s Baltimore ranks second in the South at +$990/mo. Alabama’s Montgomery also reaches the top five at +$877/mo, helped by a 6.7% appreciation rate against relatively affordable home prices.
The top five Southern markets are led by Newport News, Baltimore, Montgomery, Columbus, GA and Jackson, MS, where appreciation and principal paydown offset enough of the monthly mortgage cost to keep buying ahead of renting.
|
#
|
City
|
ST
|
Est. Monthly Mortgage
|
Median Rent (3BR)
|
Appreciation Rate
|
Principal Paydown
|
Monthly Appreciation
|
Monthly Equity Built
|
Net Cost of Owning
|
Monthly Difference
|
|
1
|
Newport News
|
VA
|
$2,561
|
$2,400
|
+3.8%
|
$273
|
$995
|
$1,268
|
$1,293
|
+$1,107/mo
|
|
2
|
Baltimore
|
MD
|
$2,324
|
$2,380
|
+3.1%
|
$235
|
$699
|
$934
|
$1,390
|
+$990/mo
|
|
3
|
Montgomery
|
AL
|
$2,160
|
$1,275
|
+6.7%
|
$237
|
$1,525
|
$1,762
|
$398
|
+$877/mo
|
|
4
|
Columbus
|
GA
|
$2,482
|
$1,320
|
+6.3%
|
$271
|
$1,634
|
$1,905
|
$578
|
+$742/mo
|
|
5
|
Jackson
|
MS
|
$1,543
|
$1,380
|
+5.9%
|
$130
|
$735
|
$865
|
$678
|
+$702/mo
|
*5% down, 6.52% rate. Rent = HUD 3-bedroom zip-level Fair Market Rent. Appreciation = annualized 2023–2026 (Movoto).
NORTHEAST: TOP 5
Despite having the fewest cities of any region (just 11), the Northeast has the highest rate of markets favoring buyers, at 82%.
Hartford, CT leads the region, and the entire study nationally, at +$2,968/mo. That result is driven by an 11.1% annualized appreciation rate from 2023 to 2026, the highest of any city in this analysis.
Hartford is a genuine outlier. The next-highest advantage in the region is Worcester, MA at +$1,640/mo, with a more moderate 5.8% appreciation rate.
|
#
|
City
|
ST
|
Est. Monthly Mortgage
|
Median Rent (3BR)
|
Appreciation Rate
|
Principal Paydown
|
Monthly Appreciation
|
Monthly Equity Built
|
Net Cost of Owning
|
Monthly Difference
|
|
1
|
Hartford
|
CT
|
$4,374
|
$2,130
|
+11.1%
|
$448
|
$4,764
|
$5,212
|
-$838
|
+$2,968/mo
|
|
2
|
Worcester
|
MA
|
$3,832
|
$2,710
|
+5.8%
|
$421
|
$2,341
|
$2,762
|
$1,070
|
+$1,640/mo
|
|
3
|
New Rochelle
|
NY
|
$4,261
|
$3,685
|
+2.7%
|
$466
|
$1,208
|
$1,674
|
$2,586
|
+$1,099/mo
|
|
4
|
Nashua
|
NH
|
$4,120
|
$2,970
|
+3.6%
|
$445
|
$1,536
|
$1,981
|
$2,139
|
+$831/mo
|
|
5
|
New Haven
|
CT
|
$4,427
|
$2,520
|
+5.2%
|
$444
|
$2,215
|
$2,659
|
$1,768
|
+$752/mo
|
*5% down, 6.52% rate. Rent = HUD 3-bedroom zip-level Fair Market Rent. Appreciation = annualized 2023–2026 (Movoto).
MIDWEST: TOP 5
Buying comes out ahead in 19 of 28 cities (68%) in the Midwest, largely due to a combination of low home prices and solid recent appreciation.
Cleveland, OH leads at +$1,298/mo. With a gross mortgage of $1,625/mo and an 8.6% appreciation rate generating $1,314/mo in monthly appreciation equity, the net cost of owning is $152/mo against a $1,450 median rent.
Dayton, Akron, and Milwaukee all show the same trend of affordable entry prices and appreciation rates between 6% and 8% that drive meaningful equity accumulation each month. Noblesville, IN is the exception: higher home prices produce a $3,815/mo mortgage, but strong 5.8% appreciation compensates for those higher prices, putting it at +$1,115/mo.
For buyers focused on the most affordable markets in the study, the Midwest offers the widest selection of options.
|
#
|
City
|
ST
|
Est. Monthly Mortgage
|
Median Rent (3BR)
|
Appreciation Rate
|
Principal Paydown
|
Monthly Appreciation
|
Monthly Equity Built
|
Net Cost of Owning
|
Monthly Difference
|
|
1
|
Cleveland
|
OH
|
$1,625
|
$1,450
|
+8.6%
|
$159
|
$1,314
|
$1,473
|
$152
|
+$1,298/mo
|
|
2
|
Dayton
|
OH
|
$1,922
|
$1,560
|
+7.0%
|
$196
|
$1,316
|
$1,512
|
$410
|
+$1,150/mo
|
|
3
|
Noblesville
|
IN
|
$3,815
|
$2,150
|
+5.8%
|
$424
|
$2,356
|
$2,780
|
$1,035
|
+$1,115/mo
|
|
4
|
Milwaukee
|
WI
|
$2,143
|
$1,570
|
+6.8%
|
$216
|
$1,410
|
$1,626
|
$517
|
+$1,053/mo
|
|
5
|
Rochester
|
MN
|
$3,738
|
$2,000
|
+6.0%
|
$408
|
$2,348
|
$2,756
|
$982
|
+$1,018/mo
|
*5% down, 6.52% rate. Rent = HUD 3-bedroom zip-level Fair Market Rent. Appreciation = annualized 2023–2026 (Movoto).
What This Means For First-Time Homebuyers
Buying comes out ahead in 41% of the cities we studied once equity building is factored in. But whether buying pays off changes depending on both prices and appreciation.
National averages tell you almost nothing about your own city. Appreciation varied widely from city to city between 2023 and 2026, and in some markets it was negative. In those cities, falling home values reduced the equity homeowners built each month, making the net cost of owning higher than the mortgage payment alone suggests. The opposite was true for markets where appreciation was high, as showcased by outliers like Hartford.
Past appreciation isn't guaranteed to continue, but in every market, the principal paydown portion of equity is guaranteed by the loan’s amortization schedule regardless of what home prices do.
Keep in mind that rates can change. Rates have risen markedly so far in 2026 following a gradual decline from post-pandemic highs. A lower future rate could improve the math for buyers who refinance, while a higher rate would weaken affordability for new buyers.
There are also costs beyond a mortgage when it comes to owning a home. Closing costs, maintenance, and HOA fees can all drive up the total cost of homeownership.
DATA & METHODOLOGY
Lower analyzed homeownership costs and rents across U.S. cities with populations of 75,000 or more, focusing on markets where homes are priced within reach of FHA borrowers. Cities were included where the median listing price exceeded $100,000, median gross rent exceeded $900/month, and the median listing price fell at or below the 2026 FHA national floor of $541,287 (per HUD and Lower.com, effective January 1, 2026). Cities with fewer than 10 active MLS for-sale listings on Movoto were excluded to ensure listing price data reflected a meaningful sample. These filters produced 169 qualifying cities, of which 136 were successfully matched to both zip-code-level HUD rent data and city-specific appreciation data.
Median listing prices and city-level appreciation data come from Movoto, a real estate search platform and Lower company. Homeowners insurance estimates are from The Zebra, with state averages used where city-level data is unavailable. Population and state-level property tax rates are drawn from the U.S. Census Bureau 2024 ACS 1-Year Estimates.
Monthly mortgage cost uses a 5% down payment and a 6.52% 30-year fixed rate (Freddie Mac Primary Mortgage Market Survey, June 11, 2026) applied to Movoto’s median listing price, and includes principal and interest, property taxes (listing price multiplied by state effective tax rate, divided by 12), homeowners insurance, and FHA MIP at 0.55% annually. The upfront FHA MIP of 1.75% is rolled into the loan balance.
Monthly equity built has two components. Principal paydown is the Month-1 principal portion of the mortgage payment, which is the amount that reduces the loan balance rather than paying interest, as determined by the amortization schedule. Monthly appreciation is calculated as listing price × city-specific annualized appreciation rate ÷ 12, where the rate for each city is the annualized listing price change from 2023 to 2026, sourced from Movoto market data. Across the 136 cities in this analysis, the mean appreciation rate is 1.6% and the median is 1.4%. Thirty-four cities have negative appreciation rates; in those cities the monthly appreciation figure is negative and increases the net cost of owning rather than reducing it. Total monthly equity = principal paydown + monthly appreciation. Net cost of owning = gross monthly mortgage − total monthly equity. Monthly difference = median rent (3BR) − net cost of owning. Cities are ranked descending by monthly difference.
The rental benchmark is the HUD FY2026 Small Area Fair Market Rent (SAFMR) for 3-bedroom units at the zip code level, representing the 40th percentile of gross rents for standard-quality units. For each city, the median SAFMR across the city’s primary zip codes was used. Cities were matched to HUD FMR areas using county FIPS codes, and to SAFMRs using primary zip codes, a deterministic method that prevents errors from cities sharing names across different states or metro areas.
This study is intended for informational and educational purposes only and does not constitute financial, mortgage, or investment advice. City-specific appreciation rates reflect what happened from 2023 to 2026, not what will happen going forward. The ownership cost does not include maintenance, closing costs, potential HOA fees, or the opportunity cost of the down payment. Individual results will vary. Contact a Lower loan expert for a personalized rate and payment estimate.
