As home prices rise across the U.S., choosing to rent has become increasingly popular. New analysis by realtor.com reveals the monthly costs of buying a home have risen by 14% over the past year. This is more than three times the 4% increase in monthly rental costs. Additionally, this analysis found that the number of places where it is cheaper to buy has significantly declined in the past year.

“Even setting aside big upfront expenses like a down payment, rising month-by-month costs are likely keeping many people from purchasing,” said Danielle Hale, chief economist at realtor.com. “Today only 41% of people live in a county where the median income family can afford to buy a home at the median list price, and affordability declined significantly over the past year. Since home ownership has historically been an important source of household wealth creation, it could be problematic if this trend continues for too long. Still, even in places where renting is currently more affordable, rising home prices provide wealth building opportunity for home buyers.”

Homeowner costs have continued to rise. In July 2018, the median monthly cost to buy a home was $1,647, compared to the average cost to rent a home at $1,267. Over the last year, 289 counties have transitioned from being more affordable to buy to being more affordable to rent. The transition included 20 larger counties with more than 100,000 residents. In just 35% of counties throughout the country, the monthly costs of buying a home are now lower than the monthly costs to rent a home, compared to 44% just last year. This disparity is even greater among large counties. Buying is still cheaper than renting for only seven percent of counties in the U.S. with a population larger than 100,000 people.

The price of entry into homeownership is becoming steeper in markets around the country. Using data from the REALTORS Affordability Distribution Curve, the July study revealed that in the top 5 rental markets those earning the median county income could only afford up to 4% of their local housing market inventory. Homeownership rates in these markets ranged between 23 to 59%, compared to the national rate of 64%.

Conversely, for the top 5 counties that favor buying, 57% to 69% of homes currently available for sale are affordable to residents earning the local median income while homeownership rates ranged from 47% to 63%. The limited availability of homes affordable for the median household suggests that renters will continue to find it challenging to become owners in these areas. At the same time, the larger selection of affordable homes available to the typical income household in the top buying counties suggest that transitioning from renting to owning will be easier in these areas.

Northern California and New York each hold three of the top 20 counties with the largest increase in the rent-versus-buy gap over the past year.