The housing market only offers 4 major cities where it's cheaper to buy a home than rent

• Nationwide, the typical home has a monthly mortgage cost that's about 25% more than rent, according to Redfin.
• However, buying is actually more affordable in Detroit, Philadelphia, Cleveland, and Houston.

In the US, it's about 25% more expensive to buy a home than rent it, but in four metro areas ownership is cheaper, according to Redfin.

An analysis of single-family homes and townhouses found that estimated monthly mortgage costs are lower than monthly rental costs in Detroit, Philadelphia, Cleveland, and Houston.

In Detroit, the typical home is 24% less expensive to buy than rent — the largest percentage discount among the 50 most populous metros, Redfin said in a report Friday. The median mortgage payment for homebuyers there is $1,296, while the average estimated rent hovers at $1,697.

Philadelphia offers a 7% discount, and it's followed by Cleveland (4% discount) and then Houston (1% discount).

Property values in these four locations have stagnated relative to the rest of the country, Taylor Marr, Redfin's deputy chief economist, explained in the report. If Americans looking to buy a home can't build equity, they have less incentive to pay a premium to own.

Meanwhile, California's Bay Area features the largest premium to homeownership in the US. It's twice as expensive to own than rent in cities including San Jose, San Francisco, and Oakland.

"Buying a home often makes more financial sense than renting if you can afford a down payment and monthly mortgage because you're building equity," Marr said. "When you own your home, your home pays you; when you rent, you and your home pay your landlord."

Still, buying isn't always the best option, as some people move often so renting makes more sense. Others simply don't have enough money to make a down payment on a property, Marr noted, and that's become increasingly common as mortgage rates climb and affordability drops.

The average rate on a 30-year fixed mortgage just topped 7% for the first time since March, Bankrate data showed Wednesday.

It's worth noting, too, that while home values in Cleveland and Detroit haven't climbed in the same way as pandemic boom-towns like Phoenix and Miami — where there are virtually zero homes that are cheaper to buy than rent — that means they also won't see the same crashes, Redfin noted.

"I wouldn't encourage people to squeeze their budgets in order to buy a home when prices are falling and we're teetering on a recession," Marr said. "In the years leading up to the pandemic, it made sense for some homebuyers to break the rule that says not to spend more than 30% of your income on monthly housing costs, but these times are more risky, so it makes sense to be a little more conservative."