A new Realtor.com report shows median rent for 0-2 bedroom properties declined year-over-year in October, the 15th straight month of decreases. In the 50 largest U.S. metropolitan areas, the median asking rent is now $1,720, down $23 from September and $40 lower than its peak in August 2022.

Meanwhile, mortgage rates are on the rise. The 30-year fixed mortgage rate average was 6.91% on Friday, down 38 basis points from a year ago but up over 1 percentage point since Sept. 17, when it hit a two-year low of 5.89%, according to Zillow rate data provided to Investopedia.

In short, renting is getting cheaper while homebuying is getting more expensive.

Is Renting Really Better Than Buying Right Now?

Let’s say you’re moving to Atlanta. In October, the median monthly rent for a 0-2 bedroom property was $1,583. By contrast, the median listing price for a house was $410,000. Assuming you put down 20% and lock in a 30-year mortgage with a fixed rate of 6.91%, your monthly payment would be about $2,162 (not including taxes or home insurance). 

In other words, you could save $579 per month ($6,948 per year) in that area by renting instead of buying a home. That’s on top of what you’d save from not having to pay for property taxes, home insurance, regular maintenance, and other homeowner expenses (though the median-priced house may be larger than a 0-2 bedroom rental).

Where Are Rent and Mortgage Rates Going in 2025?

If you’re choosing between buying and renting a home, you may want to consider more than just current data. What about future rent and mortgage rates?

According to the Realtor.com report, a surge in rental supply is expected to put further downward pressure on rents in 2025. There are 920,000 multifamily homes currently under construction, which is 50.4% higher than the pre-pandemic rate. As these new units are completed over the next year, rental inventory will increase, likely leading to lower rent prices. 

Future mortgage rates are harder to predict. Though the Federal Reserve lowered its key interest rate in September and November, mortgage rates aren’t directly tied to their policy decisions. Rates are more closely tied to the 10-year Treasury bond yield, and both have gone up the last few months.

The 10-year Treasury yield recently reached its highest point since July in the days after former President Donald Trump’s re-election. If investors continue to bet on a second Trump term, 10-year Treasury yields, and mortgage rates, by extension, could continue climbing into 2025. 

Regardless of how rents and mortgage rates will trend, the decision between renting and buying ultimately depends on your priorities. For example, if you want to start a family and put down roots, buying may be the better option—even if it’s more expensive right now. Conversely, if you value more flexibility to move, renting might be better. Weigh your options, use a mortgage calculator, and consider whether it’s smart to keep saving money right now or if it’s time to invest in your dream home.

How We Track Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.