Rent vs Buy, Measured City by City: Observed rents Covered P&I in 61% of 628 Cities

In Gary, Indiana, the median rental listing left the market asking $1,500 a month over the last 12 months. The principal-and-interest payment on the median home that sold there, with 20 percent down at 6.5 percent, was $455. In Newport Beach, California, the median Observed rent was $7,200 and the same payment was $17,369. Same country, same 12 months, and a renter's dollar bought wildly different things relative to a buyer's.

Across the whole measured universe, Observed rent cleared the P&I bar more often than most people guess. The question here is narrow and specific: does the median Observed rent in a city cover monthly principal and interest (P&I) on the median sold home there? In 384 of 628 cities (postal areas), 61.1 percent, it did, and in the median city rent cleared P&I with about $158 a month to spare. The $158 figure is the median of each city's individual rent minus P&I result. The separately reported median rent and median P&I differ by $201 because subtracting two independently calculated medians is not the same operation as taking the median of 628 city level differences. That is a necessary-but-not-sufficient screen for an investor, not a verdict that buying is cheaper than renting.

That finding ships with a warning label we intend to keep attached: P&I is not the cost of owning, it is only the financed part. This article reports the coverage numbers and then shows how fast they fall apart when the rest of ownership walks in.

The coverage curve

At the medians across the 628 qualifying markets (median of city medians): Observed rent $2,324.50 a month, sold home price $419,950 (homes: houses, condos, and townhomes), and P&I on that price at 6.5 percent, 20 percent down, 30-year fixed, $2,123.50. The median city-level rent-to-P&I ratio was 1.076.

Coverage moved hard with the rate:

What we measured

Rent is each city's median observed rent: a confirmed lease close where property records hold one, otherwise the last rent asked before a listing left the market, not the rent it first asked, drawn from a national corpus of just under 3 million rental listings that left the market; each city's median uses only listings removed during the 12-month window. Observed rent blends confirmed lease closes extracted from property records with the final asking rent on listings that left tracking; the close share is measured in asking rent vs observed rent, an earlier study that analyzes final asking rents under its own definition and says nothing about confirmed lease closes. The distinction matters. In our asking vs Observed rent study, measured on the same 12-month window, the observed rent on removed listings ran 4.6 percent above the live asking rent in the median qualifying postal market, and only 21 percent of the 1,726 qualifying postal markets showed the final ask below live asking. The two figures describe different listings, so a rent-vs-buy comparison built on live asking rents will not match this one exactly.

Price is the 12-month median sold price for homes (houses, condos, townhomes) in the same city. P&I is a standard 30-year amortization on 80 percent of that price. Both windows are the trailing 12 months at the 2026-08-22 snapshot.

Gates: a city qualified with at least 150 rental listings that left the market in the last 12 months and at least 400 closed sales; 628 cities (postal areas) cleared both, and every share in this article uses that denominator. Figures here are medians of city medians across the 628 qualifying markets.

What P&I excludes: property taxes, insurance, HOA dues, maintenance, vacancy, and any return the down payment could have earned elsewhere. One more mix note: the rent median blends unit types (houses, condos, apartments) while the price median covers homes (houses, condos, townhomes), so this is a market-level screen, not a matched-property comparison; where a city's rental mix is condo and apartment heavy, we flag it in the table.

Where rent ran furthest over P&I

Largest rent-over-P&I surplus, dollars per month at 6.5 percent:

Three of the ten are South Florida cities with condo-heavy rental mixes (Deerfield Beach 32 percent house, Delray Beach 29, Lauderhill 30), so their rent medians lean on condo and apartment rental listings. Florida also carries insurance costs far above the national assumption in the sensitivity test below, so those rows gave back more of their surplus to carrying costs than the table suggests. Abilene's $2,499 is not a typo; its rent sample is 85 percent houses.

Robustness, scoped to these ten rows: every row with at least 100 house-only rental listings that left the market showed a house-only ratio at or above its mixed ratio, so the surpluses are not an artifact of cheap apartments in the rent median.

Where the payment buried the rent

Largest P&I shortfall, dollars per month at 6.5 percent:

Why 61 percent does not mean buying was cheaper in 61 percent of cities

Rent covering P&I is necessary, not sufficient, for positive cash flow. It is a screen, never proof, and never "buying is cheaper." Here is what happened at 6.5 percent interest rate when we let the rest of ownership into the comparison:

Everything above is past-window data: rental listings that left the market and closed sales inside the window. Nothing here forecasts rents, prices, or rates.

Related studies

This article is one of three built on the same final-asking-rent corpus: Does the 1 percent rule still work? counts the cities that cleared the classic investor screen, and The best rental yields in America ranks all 628 gated cities by gross rental yield (12 times the median Observed rent over the median sold home price, before all expenses). The gap that motivated the whole series, advertised rent versus the last rent listings asked before leaving the market, is measured in our asking rent vs observed rent study.