There are plenty of reasons for the multifamily sector’s resilience. Many people are choosing to rent rather than buy a home. Mortgage interest rates are keeping some potential buyers from making the leap to homebuying. Today’s luxury apartments attract renters who want high-end amenities without the hassle of maintaining a home.
Then there’s the cost of renting vs. the cost of owning a home. According to the latest research from LendingTree, renting an apartment remains cheaper than owning a home in every large metropolitan area in the United States. This ranks as one of the key reasons why demand for apartment units continues to rise.
According to a LendingTree report released this month, U.S. homeowners with a mortgage pay 36.9% more a month than do renters.
LendingTree reported that the median monthly gross rent was $1,487 in 2024. The median monthly housing costs on homes with a mortgage stood at $2,035 during the same time. This means that renting was $548 less expensive each month or $6,576 cheaper annually.
That monthly gap is $50 more than it was in 2023, when the difference between median monthly gross rent and median monthly housing costs was $498, according to LendingTree.
In Chicago, the median apartment rent was $1,469 a month in 2024 while the median housing costs for homes with a mortgage stood at $2,237. That means that renting was $768 cheaper in Chicago than owning a home.
In Milwaukee, the median rent stood at $1,177 a month, while the median housing costs were $1,849, a difference of $672. In Madison, median monthly rent was $1,437 while median housing costs hit $2,118, a difference of $681.
In Minneapolis, renters spend a median amount of $1,444 in rent each month while homeowners with a mortgage spent a median monthly amount of $2,181. That comes to a difference of $738 each month.
Will this change? No one can predict that, though higher housing prices seem to suggest that renting might remain more affordable in the long-term.
This, then, could be yet another factor that continues to fuel the demand for multifamily housing across the United States.
