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Record-High Rent Is Still More Affordable Than Buying a Starter Home

Mortgage rates have surged this year, making it even harder for potential buyers to get into the housing market.

A "For Sale" sign outside a house in Albany, California.

A "For Sale" sign outside a house in Albany, California.

Photographer: David Paul Morris/Bloomberg

Surging mortgage rates in the US are changing the calculus on whether it’s better to buy or rent. 

These days, it is more affordable to rent than buy a starter home in 38 of the 50 largest US metro areas, according to a  report from Realtor.com. Rent is up too, with the the median monthly payment jumping 14% year-over-year in June to a record $1,876. But higher mortgage rates have pushed up the costs of buying a home even more.