Renting vs. buying: What renters and homeowners pay monthly to live in San Francisco Bay Area

The study, which looked at average rents across all types of units versus median monthly mortgage payments in the same areas, found that in San Francisco, renters spend $1,983 less monthly than those paying a mortgage — the highest difference between renting and buying in the nation. San Jose was close behind with a $1,510 difference.

Renters had the biggest financial advantage over buyers in Nacogdoches, Texas, where people spend $555 less per month each month by renting — just over a quarter of the difference seen in San Francisco, according to’s numbers. But No. 5 brought it back to California, with Santa Cruz at $476 saved monthly by renting.

But just because renting is less expensive than buying in the Bay Area doesn’t mean either is “affordable.” In the San Francisco-Oakland-Berkeley metro area, the average rent is $3,218 a month. The current average monthly mortgage is $5,201 in San Francisco and $3,295 in Oakland, according to San Jose has an average rent per month of $3,104, compared to an average monthly mortgage of $4,614.

However, because the study at average rent and median mortgages across all types of units, from studio apartments to three-bedroom homes, there are likely exceptions to the data.

“Just because renters as a whole are going to save this amount of money based on what we found, doesn’t mean that it’s going to impact everyone equally,” Brian Carberry, the managing editor for, said. “It’s going to be different based on sizes” like comparing a buying larger home to renting a larger apartment versus doing the same for studio-sized housing.

Renting is more often cheaper on a month-to-month basis than buying on the West Coast than on the east or middle of the country: Eight of the top 20 places where rent payments are lower than mortgage payments are in California, according to the data.

But that’s far from the norm. Of the 234 regions in the analysis, paying a monthly mortgage is cheaper than renting in 215 of them, Carberry pointed out. So what’s going on in California?

“I think it truly is just that housing prices in California are just so much higher than they are in a lot of other places,” Carberry said. “That’s not to say that there aren’t affordable housing options for buyers in California, but in a general sense, it’s just a lot more expensive to buy something in California.”

But that doesn’t necessarily mean that renting will be cheaper than buying in the long run, Carberry said. Rent prices tend to go up each year as people renew their leases, he explained, whereas a mortgage payment is usually fixed over a 30-year period. That means there is likely a breakeven point somewhere, which the study did not examine.

A similar study by mortgage website LendingTree used different methods but also found that San Francisco and San Jose were among the top U.S. metro areas where renting is cheaper than owning a home with a mortgage, following only New York City. The LendingTree study was based on self-reported numbers from the U.S. Census Bureau’s 2019 American Community Survey and calculated the average costs of owning and maintaining a home — including utilities, fees and taxes — on top of the mortgage.

“At some point, there does become greater value in buying versus renting,” Carberry said. “If you’re just going to look at one year, like this year versus next year, renting is more affordable by a significant amount. But in the long-run, you’re going to be better off buying.”

Rent is also going up in big Bay Area cities — San Francisco, San Jose and Oakland are all back on the rise after a pandemic slump, according to a rent report from listings website Zumper. On the home-buying front, Bay Area home buyers are seeing more options on the market compared with last year, but those houses are more expensive than ever, according to a report from real estate listing website Zillow.

But Carberry thinks the gap between renting and mortgage costs will narrow in the next year as the housing market starts to cool down.

“Right now the housing market is just so hot, and I don’t think that’s sustainable,” he said. “I don’t think a bubble is going to burst or anything, but I do think that in a year or so, people won’t be paying as much for homes as they are now.”

On top of that, people shouldn’t make their decision whether to buy only based on broad data like this, he said.

“I would just encourage people to do your homework,” Carberry said. “Figure out what you can afford and what’s going to work for you and think about long-term versus short-term.”

Danielle Echeverria is a San Francisco Chronicle staff writer. Twitter: @DanielleEchev Email:

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