Buying a home is cheaper than renting in only 4 U.S. cities.

A study by real estate company Redfin found that only four major U.S. cities are now more profitable to buy a home than to rent. They are Detroit, Philadelphia, Cleveland and Houston.

In all other major cities, from San Jose, California, to Pittsburgh, Pennsylvania, it is financially more profitable to remain a renter.

The main reason for this situation in these four cities is that they did not experience as much of an increase in housing prices during the pandemic as other major U.S. cities. Home prices nationwide rose by double-digit percentages during the pandemic, and now buyers are facing rising mortgage interest rates.

To make home buying a''more favorable than renting in most cities, interest rates should be 4% to 3%.

National statistics show that owning a home costs homeowners 25% more than renting. The cost difference between owning a home and renting an apartment is now the largest in 15 years. San Jose, California, home to Silicon Valley, has the highest home purchase prices compared to renting. The average expected monthly mortgage payment for buyers is more than $11,000, while the average rent is about $4,200. Second place''s year raising rates in an attempt to curb inflation, which has led to rising mortgage interest rates. "There will be opportunities to refinance," Alim noted. However, Redfin predicts mortgage interest rates will fall to 6 percent by the end of the year, but are unlikely to return to 3 percent in the near future.