Home prices are skyrocketing, and that makes the perennial question of whether folks should rent or buy a place to live more pressing than ever. But for some, cheap rents in a number of U.S. cities might make the answer a little more obvious.
This is an especially tough conundrum for retirees looking to relocate, as well as younger people. Or, heck, for anyone who might not have quite the financial wherewithal to come up with a down payment – to say nothing of closing costs, insurance, property taxes, maintenance … the list goes on and on.
But first things first. There’s no doubt about the tightness of the housing market. The COVID-19 pandemic led to a spike in demand that has yet to abate. At the same time, the total supply of homes for sale remains depressed. Put it all together, and homebuyers are encountering sticker shock pretty much anywhere they look.
Get this: Single-family home prices have soared an astonishing 14.6% over the past 12 months, according to the S&P CoreLogic Case-Shiller U.S. National Home Price index.
Amid that backdrop, we thought it would be a good time to look for large, cosmopolitan urban areas that also happen to sport the cheapest rents. And so we turned to data from the Council for Community and Economic Research (C2ER) Cost of Living Index.
C2ER surveys prices for scores of goods and services in nearly 280 census-designated areas, both large and small. For the purposes of our survey looking for the cheapest apartment rents, we limited ourselves to cities with metro populations of at least 1 million, per the U.S. Census Bureau’s list of core-based statistical areas.
With that methodology in place, we were able to find the biggest U.S. cities with the cheapest apartment rents. Note that the rents listed below are for the cities at the center of the metro areas we surveyed. These rents offered the steepest discounts to the national average rent for apartments of all types ($1,170 per month), according to C2ER data. Cities are listed by highest to lowest rent.
Data courtesy of the Council for Community and Economic Research (C2ER) Cost of Living Index, the U.S. Bureau of Labor Statistics and the U.S. Census Bureau. Cities are listed by apartment rent, from highest to lowest.
10. Houston, Texas
- Metro population: 7,066,140
- Median household income: $69,193 (U.S.: $65,712)
- Average apartment rent: $1,119 (U.S.: $1,170)
The Houston metropolitan area, which includes The Woodlands and Sugar Land, is home to more than 7 million people, making it the fifth largest metro area in the U.S. Yet despite its gargantuan size, the city of Houston proper (pop. 2.3 million) boasts some of the cheapest apartment rents among urban areas with at least 1 million residents.
The average monthly rent for apartments of all sizes in Space City is actually 4.4% lower than the national average. That’s a steal when you consider how much the city and surrounding area have to offer.
On the cultural front, attractions range from the Houston Museum of Fine Arts to Space Center Houston to the Houston Symphony, one of the nation’s top orchestral ensembles. Sports fans can root for Houston’s six professional major league teams. Throw in the wide variety of restaurants and nightlife options – not to mention the metro area’s diversity of peoples and cultures – and Houston’s cosmopolitan bona fides cannot be denied.
It should be noted, however, that two factors tamping down rents in the city of Houston itself are a comparatively low median household income of $52,450 and a poverty rate of 19.7%, which is about 1.5 times the Texas state rate of 13.6%.
9. Indianapolis, Indiana
- Metro population: 2,076,531
- Median household income: $62,502
- Average apartment rent: $1,039
Big city living without big city prices is an apt description of affordable Indianapolis, which centers the Indianapolis-Carmel-Anderson metro area. Indeed, apartment rents in the city of Indy are 11.2% cheaper than the national average.
The capital of Indiana has a solid economy – the city is home to two Fortune 500 companies – and hosts several colleges and universities, including Butler. And then there’s the fact that Indianapolis, also known as the Crossroads of America, is particularly family-friendly. Kids will get a kick out of the Children’s Museum of Indianapolis, the world’s largest museum of its kind.
If a children’s museum isn’t the pace you’re looking for, zip over to the Indianapolis Motor Speedway. The famed track, which hosts the Indy 500 and Brickyard 400 races, also boasts a racing museum and a golf course.
Lastly, we would be remiss if we didn’t mention the city’s culinary reputation. Indy’s wide range of high-quality restaurants and microbreweries have earned it the sobriquet of “most underrated food city in the U.S.”
Keep in mind, however, that the city of Indianapolis itself (pop. 870,340) boasts some of the cheapest apartment rents due in part to relatively weaker economic conditions. Median household income in the city is just $49,661, vs. $65,712 for the nation as a whole. And the city’s poverty rate of 15.8% is significantly higher than the 10.5% found across the Indianapolis-Carmel-Anderson metropolitan area.
8. Louisville, Kentucky
- Metro population: 1,266,389
- Median household income: $61,172
- Average apartment rent: $1,038
The Greater Louisville area, home to nearly 1.3 million, is a sprawling metro zone that stretches north into Indiana. And the municipality at the center of it all – affectionately known as Derby City, the Gateway to the South and the home of Muhammad Ali – boasts some of the cheapest rents in big-city living.
Renters shell out an average of $1,038 per month, or 11.3% less than the national average, to live in the city of Louisville. That reasonable sum affords them access to cultural and educational institutions such as the Muhammad Ali Center, the Louisville Slugger Museum & Factory and no shortage of historic bourbon distilleries. Meanwhile, sports fans can’t quibble with the University of Louisville’s longtime prowess in Division I college athletics.
As for the economy, major employers include UPS Airlines, a subsidiary of United Parcel Service (UPS), and Ford Motor (F). Fortune 500 companies such as health insurer Humana (HUM) and Yum Brands (YUM), which operates the KFC, Pizza Hut and Taco Bell restaurant chains, are headquartered in Louisville.
If there’s a knock on the Louisville-Jefferson County area (pop. 617,630) at the center of the metropolitan zone, it’s that both median income ($54,853) and the poverty rate (15.4%) compare unfavorably to Greater Louisville. Those economic realities no doubt play a part in keeping apartment rents in check.
7. Tucson, Arizona
- Metro population: 1,047,279
- Median household income: $56,169
- Average apartment rent: $955
Fast-growing Tucson is a popular destination for retirees and younger folks alike. Plenty of sunny days and dry weather make this Sun Belt city an ideal location for outdoor activities, from hiking and mountain biking to golfing. Heck, if you like to hit the links, the Tucson metro area boasts 44 courses within 20 miles.
The natural beauty of the city known as “the Old Pueblo” is another draw. Tucson sits on an alluvial plain in the Sonoran Desert, surrounded by five mountain ranges. If the desert gets too hot and dry for folks, Mount Lemmon Ski Valley – at an altitude of more than 9,000 feet above sea level – is just an 80-minute drive from downtown.
Then there’s the University of Arizona, which helps bring a college-town feel to Arizona’s second-largest city. And happily for renters of all ages, apartments can be found at student-budget-friendly prices. Average rents in the city of Tucson proper (pop. 548,082) come to $955 a month, or more than 18% below the national average.
It should be noted, however, that Tucson metro’s median household income is 14.5% lower than the national level. And in the city of Tucson proper, median household income is just $44,365, or almost a third below the U.S. median. A poverty rate of 19.1% – vs. 13.5% for the state of Arizona – also factors into the city’s cheap apartment rents.
6. Cincinnati, Ohio
- Metro population: 2,219,750
- Median household income: $66,825
- Average apartment rent: $944
Skyline Chili’s Loaded Chili Bowl is a pretty good bargain, but Cincinnati’s apartment rents are arguably an even better deal. Renters in the Queen City pay an average of $944 a month. That’s a 19.3% discount to the national average.
But cheap rents are just part and parcel of this widespread metro area’s generally low overall costs for housing. Indeed, the greater Cincinnati area, which stretches into neighboring Kentucky and Indiana, enjoys general housing expenses more than 20% below the national average.
That’s a remarkable fact considering the city’s density of corporate headquarters. Indeed, six Fortune 500 companies – including Procter & Gamble (PG) and Kroger (KR) – call Cincinnati home.
Cheap rents also come in handy given that this metro area with more than 2.2 million people boasts all sorts of big-city events and attractions. The Ultimate Underground Queen City Tour, Cincinnati Symphony Orchestra and the aforementioned Skyline Chili chain of fast-food restaurants are just a few of the offerings on hand. And then, of course, there’s Cincinnati’s reputation as a big-time sports town, thanks to the NFL’s Cincinnati Bengals and MLB’s Cincinnati Reds.
The downside of having some of the cheapest apartment rents in the nation? The city of Cincinnati (pop. 303,954) has a poverty rate of 23.1%, which is roughly double the rate of the Greater Cincinnati metro area.
5. Birmingham, Alabama
- Metro population: 1,090,435
- Median household income: $58,366
- Average apartment rent: $930
Residents of Birmingham, which centers the Birmingham-Hoover metro area, enjoy below-average costs for all m
anner of goods and services. Whether we’re talking about groceries, transportation or health care, folks can catch a break on loads of prices vs. what the typical American pays.
And nowhere are these savings more salient than in housing costs, which collectively run 21.2% below the national level, per C2ER. Partly that’s a function of relatively affordable rents. The average apartment rents for $240 a month less, or a 20.5% discount to, the national average.
At the same time, Birmingham is a commercial and educational powerhouse. Major companies calling the area home include bank holding company Regions Financial (RF); Vulcan Materials (VMC), a maker of construction materials, and healthcare provider Encompass Health (EHC). A number of major colleges of medicine, dentistry and law also boost the local economy. Taken all together, the concentration of institutions makes Birmingham a key regional business center and an important national financial center.
The metro area also serves as the cultural capital of Alabama, offering a plethora of museums and galleries, the Alabama Ballet and the Alabama Symphony Orchestra.
There is, however, a flip side to cheap apartment rents: Birmingham metro’s median household income is 11.2% below the national level. And in the city of Birmingham itself (pop. 210,080), median household income of $36,753 is even lower. Lastly, the city proper has a poverty rate of 25.2%, vs. the Alabama state rate of 15.5%.
4. Memphis, Tennessee
- Metro population: 1,344,910
- Median household income: $54,859
- Average apartment rent: $903
To say that real estate is cheap in Memphis is an understatement. A typical apartment in Memphis rents for about $267 a month less than the national average, or a discount of almost 23%.
For those looking to put down roots, average home prices come to about $273,400 – an amount that would elicit screams from people who live in the most expensive U.S. cities. (Nationally, the average home costs $370,900, per C2ER.)
The pandemic recession clobbered the local economy, but things are really starting to pick up. The metro area – which stretches into Mississippi and Arkansas – has seen its unemployment rate fall to 6.3% from an April 2020 peak of 13%. And there’s good work to be had if you can get it.
Proximity to the mighty Mississippi River makes Memphis a hub for the shipping and transportation industries. Three Fortune 500 companies – FedEx (FDX), International Paper (IP) and AutoZone (AZO) – call the city home. You’ll also find numerous colleges and universities, an NBA franchise, mouthwatering ribs and, of course, Graceland.
As noted with some other cities on this list, the cheapest rents often come with below-average median household income and elevated poverty rates. In the city of Memphis itself (pop. 651,088), median household income of $43,794 is well below the national level of $65,712. And the city’s poverty rate of 21.7% is greater than the Tennessee rate of 13.9%.
3. St. Louis, Missouri
- Metro population: 2,801,423
- Median household income: $66,417
- Average apartment rent: $887
The St. Louis metro area, which spills over into neighboring Illinois, boasts big-city amenities at bargain price
Major league sports certainly help put the city on the national radar, but three national research universities, an extensive roster of major corporate headquarters, and an internationally known symphony orchestra place St. Louis in rare company when it comes to what residents receive with cheap apartment rents.
The city known as the Gateway to the West is home to five Fortune 500 companies, including Centene (CNC), Emerson Electric (EMR) and Post Holdings (POST). As for major academic institutions, the city is host to Saint Louis University and Washington University in St. Louis.
And then there are the city’s legions of family-friendly activities, from the Gateway Arch in downtown’s Gateway National Park to the St. Louis Zoo and the Missouri Botanical Garden.
The presence of so many major corporations and universities helps give the metro area a median household income higher than the U.S. level. But although the typical apartment rents for 24.2% less than the national average in the city of St. Louis itself (pop. 300,576), this center of the metro area suffers from significantly lower incomes and a higher poverty rate than the wider metro area or state of Missouri as a whole.
2. Oklahoma City, Oklahoma
- Metro population: 1,408,950
- Median household income: $60,605
- Average apartment rent: $873
The largest city in Oklahoma offers remarkably affordable prices for its size. Whether we’re talking about Oklahoma City proper, or its metro area that includes Norman and Edmond, just about everything in this municipal region is a relative bargain.
And that’s especially true if you’re a renter. The typical apartment in Oklahoma City goes for $873 a month, or more than 25% below the national average. Indeed, cheap rents contribute to the city’s unusually low overall housing costs, which run almost 30% behind the national level.
Although rents and other expenses have more of a small-town feel, Oklahoma City offers plenty of big-city attractions, from a philharmonic orchestra to the National Softball Hall of Fame and Museum. At the professional sports level, the NBA’s Oklahoma City Thunder is a regularly competitive team.
Thanks to its location in the heart of oil country, Oklahoma City also hosts a number of brand-name energy companies. Major employers include Devon Energy (DVN), Chesapeake Energy (CHK) and Continental Resources (CLR).
Oklahoma City proper (pop. 655,158) has a lower median household income ($55,492) than the metro area around it, which factors into why the city boasts some of the nation’s cheapest apartment rents. Meanwhile, OKC’s poverty rate of 15.8% is higher than the metro area rate of 13.1%.
1. Buffalo, New York
- Metro population: 1,127,983
- Median household income: $60,105
- Average apartment rent: $860
Of all the U.S. cities with a metro population of more than 1 million, none has cheaper apartment rents than Buffalo, N.Y. The average apartment in the Nickel City goes for $860 a month, or 26.5% less than the national average.
The state’s second-largest city is perhaps most famous as the birthplace of buffalo wings, but it has more highfalutin attractions too. The B
uffalo Symphony Orchestra, Albright-Knox Art Gallery and Shea’s Buffalo Theatre are all top notch. The area is also home to the State University of New York at Buffalo, which hosts a number of major research centers. Architectural gems such as the art deco Buffalo City Hall and Frank Lloyd Wright’s Martin House remind residents and tourists alike of the city’s once glorious past.
And then, of course, there are the professional sports teams, most notably the NFL’s Buffalo Bills and the NHL’s Buffalo Sabres. True, the city gets plenty of ribbing for its rough winters, but Buffalonians insist that a location on the shores of Lake Erie and sublime summer weather more than make up for the long stretches of cold and snow.
As alluded to above, this Rust Belt city has declined precipitously from its early 20th century peak – and that contributes to its affordability today. Median household income in the city of Buffalo (pop. 255,300) is just $40,843. Meanwhile, a poverty rate of 28.8% is more than double New York State’s rate of 13%.