-- Lower.com has released a new housing market analysis showing that in 64 of the 136 U.S. cities studied, buying a home now makes more financial sense than renting when the full cost of ownership is taken into account.
The report, released Monday, examined housing markets where home prices fall within Federal Housing Administration loan limits, making them accessible to first-time buyers with down payments as low as 3.5 percent. Rather than comparing gross mortgage payments against rent, Lower factored in the equity homeowners build each month through principal paydown and local home price appreciation, arriving at what it calls the net cost of owning. The approach shifts the calculus significantly in many markets.
"Homeownership is one of the most powerful wealth builders in America, and this study shows why," said Dan Snyder, CEO of Lower. "When you factor in the equity homeowners build each month, the case for buying in the right market becomes much clearer."
Cleveland Stands Out in the Midwest
Among the report's most striking findings is the strength of midwestern markets, where 20 of 28 cities analyzed favor buying over renting. Cleveland ranks first in the region and third nationally, with buyers coming out $1,359 per month ahead of renters on a net-cost basis. The city's estimated monthly mortgage for a median-priced home runs $1,578, but an 8.6 percent annualized appreciation rate, among the highest in the study, generates roughly $1,314 in monthly home equity through appreciation alone. Add in first-month principal paydown of $173, and the net cost of owning in Cleveland falls to just $91 per month against a median three-bedroom rent of $1,450.
Those figures draw from Cleveland real estate market trends tracked by Movoto, the real estate search platform that served as the study's primary source for listing prices and city-level appreciation data. Movoto is a Lower company, and its market data formed the backbone of the report's appreciation calculations across all 136 cities.
Dayton and Akron post similar profiles, with appreciation rates of 7.0 and 6.2 percent respectively and monthly mortgage payments well under $2,000. Detroit rounds out the Ohio-Michigan corridor at plus $989 per month, driven by 7.7 percent appreciation. The common thread across the region is affordable entry prices paired with appreciation that has meaningfully outpaced the national study average of 1.6 percent annualized from 2023 to 2026.
The Equity Factor Changes Everything
The core argument of the report is that the standard rent-versus-buy comparison leaves out the most important variable: equity. When a homeowner makes a monthly mortgage payment, a portion goes toward paying down the loan balance directly, money that stays with the homeowner rather than a landlord. In markets where home values are also rising, that effect compounds. The Lower analysis separates these two equity streams — guaranteed principal paydown and market-dependent appreciation — so readers can see what is locked in versus what depends on local conditions.
Nationally, the study found 34 of its 136 cities posted negative appreciation between 2023 and 2026, meaning that in those markets, falling home values offset the equity built through principal payments and pushed the net cost of owning higher. The report is explicit that past appreciation is not a guarantee of future performance and cautions buyers against treating any single city's recent growth rate as a projection.
Hartford, Connecticut, tops the national rankings at a $3,138-per-month advantage, driven by an 11.1 percent annualized appreciation rate that the report itself describes as an outlier driven by supply constraints. Worcester, Massachusetts, comes in second at plus $1,800 per month with a more moderate 5.8 percent appreciation rate. The Northeast region as a whole had the highest share of buy-favoring markets at 86 percent, though it also had the fewest cities analyzed.
FHA Loans at the Center of the Analysis
The report's focus on FHA-eligible markets is deliberate. FHA loans, backed by the Federal Housing Administration, allow qualified buyers to put down as little as 3.5 percent and accept lower credit scores than conventional mortgages typically require. Lower's analysis used the 2026 FHA national loan limit of $541,287 as its upper boundary, filtering out higher-priced markets where first-time buyers are less likely to compete. All monthly cost estimates assume a 5 percent down payment and a 6.11 percent 30-year fixed rate, reflecting Freddie Mac's March 12 weekly average.
The rent figures used as a comparison benchmark come from the U.S. Department of Housing and Urban Development's Small Area Fair Market Rents for three-bedroom units at the zip code level, representing the 40th percentile of gross rents for standard-quality units. Using zip-level rents rather than broad metro averages gives each city its own localized baseline, which the report argues produces a more honest comparison.
Lower notes that its ownership cost estimates do not include maintenance, closing costs, homeowners association fees, or the opportunity cost of the down payment — factors that can add meaningfully to the real cost of owning. The company encourages prospective buyers to use the study as a starting point and consult a loan officer for a personalized estimate.
What It Means for First-Time Buyers
The study's 47 percent figure — the share of cities where buying beats renting — sits close to the midpoint, a finding Lower describes as more nuanced than national headlines about the housing affordability crisis typically suggest. The National Association of Realtors has reported that first-time buyers made up just 24 percent of home purchases in the 2023 to 2024 period, the lowest share since 1981, as elevated prices and mortgage rates have pushed many prospective owners to the sidelines.
Lower's analysis suggests the picture varies enormously depending on where a buyer is looking. In the Midwest and parts of the South, including Montgomery, Alabama, and Newport News, Virginia, the monthly advantage of owning over renting exceeds $1,000 once equity is factored in. In the West, where appreciation between 2023 and 2026 was modest in most markets, only 35 percent of cities favor buying.
The report's broader takeaway is that the rent-versus-own decision is fundamentally a local one. "National averages tell you almost nothing about your specific city," the report states. "The gap between the best and worst markets spans thousands of dollars per month."
For first-time buyers evaluating options, the study offers a city-by-city breakdown of gross mortgage costs, median rents, appreciation rates, and monthly equity built — a framework that makes the comparison concrete rather than conceptual.
The full report and methodology are available at lower.com/insights.
About Lower.com
Lower.com is a financial technology and mortgage company focused on simplifying the home financing process through digital tools and data-driven insights. The company provides mortgage solutions designed to support homebuyers across a range of markets, including FHA-eligible segments. Lower.com integrates housing data, including Cleveland real estate market trends, into research and analysis to support informed decision-making. The company references market benchmarks such as Freddie Mac's March 12 weekly average and industry data from the National Association of Realtors in its reporting and insights.
Contact Info:
Name: Amy Marshall
Email: Send Email
Organization: Lower
Website: https://www.lower.com/
Release ID: 89191475
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