At 7.17% mortgage rates, renting is thousands cheaper than buying in some cities

The 30-year fixed mortgage rate has climbed to 7.17%, near a two-year high, and existing-home sales just fell to a 14-month low of 3.98 million a year. At this rate, buying costs so much per month that fewer people are doing it, and more are renting instead.

In Seattle, owning the typical home now costs $3,688 more a month than renting one.

What owning costs against renting, right now

For each city we took the median home value, assumed 20% down and a 30-year loan at 7.17%, and added roughly 1.3% of the home's value a year for property taxes and insurance. That's the all-in monthly cost of owning, set beside the typical rent.

The split is stark. In the expensive-home cities, owning runs $1,700 to $3,700 a month above renting the same kind of place, which is a car payment or two in pure monthly difference. In the cheap-home cities it flips, and in Chicago and Detroit buying the typical home actually costs less each month than renting it does.

Why the rate does this

The rate is the whole difference between now and the pandemic, when the 30-year sat near 2.75%. On Seattle's median home, the loan payment alone runs about $4,938 a month at 7.17%. At 2.75% the same loan would cost roughly $2,980, a difference of nearly $2,000 a month on the identical house at the identical price.

That's what rate lock-in means from the buyer's side. Prices never fell to match the higher rates, so the monthly cost of a mortgage jumped while rent, which answers to supply and local wages rather than Treasury yields, didn't move nearly as much. The gap between the two is what pushes a would-be buyer back into a lease.

It compounds from the seller's side too, since homeowners holding sub-4% mortgages won't sell into a 7% market, so listings stay scarce, prices stay firm, and the buyer who does step in pays both a high price and a high rate. The renter skips both.

What this does and doesn't prove

This is a monthly cash comparison, and it isn't a full verdict on renting versus buying. Owning builds equity while rent buys none, a mortgage payment is mostly fixed while rent tends to rise, and the tax treatment of the two differs. Over a long enough hold, ownership often wins even from a worse monthly starting point.

What the numbers do explain is the behavior in the headlines. When owning the same home costs $2,900 more a month in Los Angeles, plenty of households that could technically qualify are choosing to rent and invest the difference, or simply can't clear the payment at all. That's the demand keeping the rental market tight even as home sales stall.

The read for a renter is that this is a moment of leverage on the buy side and pressure on the rent side. If you were on the fence about buying, the monthly math has rarely argued harder for waiting, and we walked through the fuller decision in should you rent or buy right now. For the rate-independent version of the comparison, our price-to-rent ratio by city ranks where buying pencils out before financing costs enter the picture.

Sources

• Freddie Mac Primary Mortgage Market Survey, for the 30-year fixed rate

• National Association of Realtors, existing-home sales for August 2026

• US Census Bureau, American Community Survey, table B25077, median home value

• RentDataNow city rent data, anchored to the Zillow Observed Rent Index, June 2026