Seattle – September 18, 2026 -- Renters across the United States are paying $1,066 less per month than typical home buyers, according to Zillow's latest Rental Market Report, with the gap holding in all 50 largest U.S. metros.
Typical rent sits at $1,948 versus a $3,014 mortgage payment
The Zillow Observed Rent Index puts typical U.S. rent at $1,948 a month, while the typical new home buyer's monthly payment -- including taxes and insurance -- totals $3,014. That works out to $12,792 a year in savings for renters, a gap Zillow says has widened as mortgage costs rose $140 over the past six months, more than four times the $32 increase in typical rent over the same period.
Investing the difference could grow into $8,041 over five years
Renters who invest the monthly savings at the rate of the 10-year Treasury yield could earn an additional $322 in the first year alone, according to Zillow. Assuming rents and home buying costs hold steady, that could compound to a cumulative $72,000 after five years -- money that avoids the closing costs, maintenance and other expenses tied to homeownership.
San Jose renters save the most, banking $7,883 a month
Coastal markets show the widest gaps. San Jose renters save $7,883 a month compared to buyers, followed by San Francisco ($5,413), Los Angeles ($4,441) and San Diego ($4,235). Investing those monthly differences at the 10-year Treasury rate could return as much as $2,381 in San Jose and $1,635 in San Francisco in the first year.
A household needs $42,000 more in income to afford a mortgage than a rental
Zillow estimates a household needs $77,919 in annual income to afford the typical U.S. rental, compared to more than $120,500 to afford a typical mortgage payment with 10% down. Mischa Fisher, chief economist at Zillow, said the idea that renting is a financial consolation prize is outdated, noting that renters who save and invest the monthly difference are often making a sound financial choice, though he added that lifestyle factors -- like moving flexibility versus stable long-term payments -- also matter.
Zillow's rent versus buy analysis shows the decision typically favors renting for households planning to stay five years or less, with cash-flow differences potentially reaching tens or hundreds of thousands of dollars over that period.