In most of the largest metropolitan areas in the U.S., the typical cost of rent exceeds the typical cost of a monthly mortgage payment – and that spells opportunity for homeowners considering renting out their properties in those locales, according to real estate website Zillow.
The company said it ran the numbers and found that typical rent payments were higher than mortgages in 33 of the nation’s 50 biggest metros, with Memphis, Tenn., having the greatest gap, followed by Miami and Atlanta. Southern cities dominated the top 10, but a few Midwestern metros hit the rankings, too.
Zillow also pointed to a recent study by the Pew Research Center, which showed that seven out of 10 rental properties in the U.S. are owned by individuals and that those individuals typically own just one or two properties.
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“Single-family homes comprise about one-third of the nation’s total rental stock,” Zillow economist Alexandra Lee said in a statement. “Owners who do rent out their properties can provide both much-needed rental inventory in tight markets as well as sought-after space and amenities for families looking to move up from an apartment.”
Zillow also reported its data shows that while rent growth across the U.S. slowed dramatically following the coronavirus outbreak, it rebounded quickly in 2021 with Zillow’s numbers showing rents in July are up annually in all 50 major metros.
Here’s a breakdown of the top 10 cities in the U.S. where typical rents are more than typical mortgage payments.
Top 10 cities where rents exceed mortgages:
Memphis, Tennessee (iStock)
1. Memphis
Typical monthly rent: $1,504
Typical monthly mortgage: $948
Difference: $556
Size ranking: 41
2. Miami
Typical monthly rent: $2,249
Typical monthly mortgage: $1,727
Difference: $522
Size ranking: 8
3. Atlanta
Typical monthly rent: $1,787
Typical monthly mortgage: $1,363
Difference: $424
Size ranking: 9
4. Birmingham
Typical monthly rent: $1,271
Typical monthly mortgage: $868
Difference: $403
Size ranking: 49
5. Tampa
Typical monthly rent: $1,819
Typical monthly mortgage: $1,435
Difference: $384
Size ranking: 19
6. Indianapolis
Typical monthly rent: $1,375
Typical monthly mortgage: $1,044
Difference: $331
Size ranking: 33
7. Orlando
Typical monthly rent: $1,758
Typical monthly mortgage: $1,444
Difference: $314
Size ranking: 27
8. Charlotte
Typical monthly rent: $1,628
Typical monthly mortgage: $1,339
Difference: $290
Size ranking: 24
9. Oklahoma City
Typical monthly rent: $1,210
Typical monthly mortgage: $931
Difference: $279
Size ranking: 42
10. Detroit
Typical monthly rent: $1,387
Typical monthly mortgage: $1,119
Difference: $268
Size ranking: 12
https://www.foxbusiness.com/real-estate/cities-with-higher-rent-payments-vs-mortgages
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