Shrinking Rent Savings in DC Ease Path to Homeownership for Aspiring Buyers

The financial gap between renting and buying a starter home in Washington, DC, narrowed in March, potentially making homeownership a more viable option for the costly metro's current renters.

Across the 50 largest U.S. housing markets, renting a starter home continued to be more affordable than buying in March. Yet nationally, the savings shrank to $920 from last year’s $1,056 as a result of easing mortgage rates, according to the March rent report from Realtor.com®. 

San Jose, CA, Boston, Los Angeles, Washington, DC, and San Diego saw their renter savings diminish by the widest margins, ranging from $319 to $420, compared to March 2025.

For instance, the typical San Jose renter spent $3,276 on housing last month—$2,425 less than the $5,701 paid by the average homeowner. However, this monthly renter advantage has shrunk by $420 from the same time last year.

However, Realtor.com economist Jiayi Xu cautions that a closing gap between monthly buy and rent costs is not synonymous with overall affordability. In most of these high-priced cities, purchasing a home remains drastically more expensive than leasing one—though Washington, DC, in particular, is emerging as a notable exception.  

To determine these figures, researchers compared the monthly costs of homeownership against leasing.  They calculated mortgage payments based on the median list price of starter homes, assuming a 9% down payment and the prevailing 30-year fixed mortgage rate for March. The calculation also factors in HOA fees, taxes, and homeowners insurance averaged at the metro level. 

Next, researchers compared the buy cost with the median rent in each of the 50 metros, arriving at the conclusion that while renting remains significantly more affordable than purchasing, the overall advantage narrowed by $136 across the top 50 metros compared to a year ago, with expensive markets faring the worst.

What sets DC apart from the rest?

"DC has seen both rents and buying costs soften, but buying costs have softened by more than rental costs in the last year," says Realtor.com Chief Economist Danielle Hale.

In the nation's capital, the sizable drop in the rental advantage, totalling $338, was sufficient to place the market among the top five metros where buying could be within reach for renters in the very near future.

In March, the median rent in DC was $2,281, which is $707 (or 31%) cheaper than the typical monthly cost of homeownership. 

For comparison, homeownership in L.A. came with a massive 81% premium over median rent. 

As a result, DC finds itself among five relatively affordable markets, including Pittsburgh, Memphis, TN, Baltimore, and Orlando, FL, where buying a starter home is not a far-fetched proposition, provided that certain conditions are met. 

If the current trends hold steady, with rents decreasing at an annual rate of 1.5% and buying costs easing 5.9%, Xu says it would take three years for purchasing to become more affordable than leasing in DC—double the time than in Pittsburgh, but a year faster than in Orlando. 

Notably, DC is by far the most expensive rental market on the list, with Baltimore a distant second with a median monthly rent of $1,808.

Xu points out that the trends in the five markets are driven by different forces: rents rising, buying costs falling, or both. 

In Pittsburgh, increasing rent is the deciding factor that could make buying there more affordable than renting in 1.5 years. In DC and Memphis, on the other hand, decreasing listing prices are the dominant force. 

Looking at DC, Hale says that the area's labor market has softened, with declines in payroll jobs and employment over the past year, led by federal layoffs. Importantly, a large share of the region's employment base is in the government sector. 

The median listing price in the DC metro was down 5.4% year over year as of March. Combined with the drop in mortgage rates, Hale says the cost to buy a starter home plunged 10.7%, even as condo and homeowners association fees rose. 

"Changes in federal employment, particularly in the DC area, have undoubtedly played a role in the softer real estate market," says the economist. "Put simply, the DC-area housing market has hit some speed bumps as the region adjusts to significant changes in the federal workforce."

The Realtor.com Market Clock indicates that the metro is currently a late balanced market marked by growing inventory and softening prices. 

Despite the market slowdown, Hale notes a distinct silver lining for prospective buyers.

"This has created an opportunity for those who see the DC area as their home in the longer run and want to put down roots," she says. "Buying costs have softened more than rents, reducing the upfront premium that it typically takes to become a homeowner in the region."

A look at the national rental market

At the national level, March marked the 32nd straight month of year-over-year rent declines, as typical asking rent fell $25, or 1.5%, from the same period in 2025. 

The median rent across the 50 largest U.S. metros registered at $1,669 last month, down $90 from its summer 2022 peak.

"As we enter the spring season, we expect the median asking rent to tick up on a monthly basis—a typical seasonal pattern," says Xu. "However, given the surge in multifamily construction over the past few years, we anticipate continued year-over-year declines. In other words, rents are unlikely to reach a new peak by the end of 2026."

Median asking rents shrank annually across all unit sizes, with two-bedrooms seeing the largest annual decline of 1.7%, settling at $1,859 in March.

The rent for one-bedroom units dipped 1.1% to at $1,563, while the median rent for a studio retreated by just 0.7%, to $1,410.