Just four major U.S. cities where buying a home is cheaper than renting.

Buying a home is cheaper than renting in Detroit, Philadelphia, Cleveland and Houston. The biggest premium on homeownership is seen in the Bay Area, where buying a home costs twice as much as renting. Nationwide, owning a home costs about 25 percent more per month than renting.

Lowering mortgage rates will reduce the premium on home ownership. If the rate drops to 5%, buying a typical home will cost about 10% more than renting it.

There are only four major U.S. cities in which buying a typical home will be cheaper than renting it - that is, the monthly mortgage payment is less than the monthly rent. In Detroit, a typical home costs 24% less than its''renting is the biggest discount among the 50 most populous metros.

This is evidenced by Redfin's analysis of single-family homes, condos/co-ops and townhomes in the 50 most populous metros in the U.S.

Reasons why buying a home may be cheaper than renting:

• The possibility of creating a property
• Fixed monthly costs
• Tax benefits

The benefits are greatest on the West Coast because that's where homebuyers expect greater potential for property development based on historical data, Marr explained.

In Bay Area, it costs twice as much to buy a home as it does to rent it.

Mortgage rates would have to fall significantly for owning to become cheaper than renting in other parts of the country. If the interest rate on a 30-year fixed mortgage drops to 5%, the median monthly mortgage payment for buyers would be $2,993, 10% higher than the median monthly rent payment of $2,716. That's well below the current 25% premium for homeownership, which values the monthly mortgage payment at $3,385 and rent at $2,715. If rates fall to 4%, the expected premium drops to 1%. And if they return to 3%, owning will become 7% cheaper.

Not surprisingly,''that there are virtually no homes in the Bay Area that are cheaper to own than to rent. But that's also the case in Sacramento, Las Vegas, Phoenix and Austin, Texas - metros that have recently been fairly affordable.

"Housing affordability is an issue in Las Vegas. During the home buying boom during the pandemic we had a lot of people moving out of expensive coastal neighborhoods. This caused home prices to rise faster than wages, creating an unfair environment for locals looking to buy," said local Redfin top real estate agent Shay Stein.