For many California families, renting isn’t just the cheaper option—it can mean keeping tens of thousands of dollars compounding in the stock market every year.

A comparison of home prices and rents shows California dominates the list of America’s least affordable places to buy a home, according to a new report from Zumper.

In several cities, the monthly cost of owning a home is thousands of dollars higher than renting a similar property.

The biggest gap is in San Jose, where families who rent instead of buy save about $8,593 a month, or more than $103,000 a year.

The city has the nation’s highest price-to-rent ratio at 55.0, based on a median home price of $2,030,000 and a median monthly rent of $3,073.

Anaheim ranks second.

Renting instead of buying saves families about $5,702 a month, or roughly $68,400 a year.

The city’s median home price is $1,442,900, compared with a median monthly rent of $2,514, giving it a price-to-rent ratio of 47.8.

San Francisco renters are also coming out far ahead.

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Buying a median-priced home costs about $3,832 more each month, meaning renters save nearly $46,000 a year.

The city has a median home price of $1,350,000 and the highest median rent on the list at $3,926 per month, resulting in a price-to-rent ratio of 28.7.

In San Diego, renters save about $3,208 every month, or about $38,500 a year.

The city’s median home price is $1,050,000 and the median rent is $2,818, producing a price-to-rent ratio of 31.1.

Los Angeles also heavily favors renters.

Choosing to rent instead of buy saves about $2,325 a month, or nearly $28,000 a year.

The city’s median home price is $858,500, while median rent sits at $2,670, creating a price-to-rent ratio of 26.8.

The analysis uses two measures to compare buying and renting.

The first is the price-to-rent ratio, which divides a market’s median home price by one year’s worth of median rent. 

A common rule of thumb says a ratio above 21 favors renting, below 15 favors buying and anything in between is considered a toss-up. 

Across more than 80 markets analyzed, the national midpoint is about 20.

The second is the PITI cost delta, which measures the difference between a monthly mortgage payment, including principal, interest, taxes and insurance, and the monthly cost of renting.

 The larger the gap, the more money renters keep in their pockets each month.

California is not alone on the list.

Salt Lake City, Seattle, Portland, Reno and Boise also rank among the markets where renting is financially favored. 

Record-high home prices have sparked a rise in “rentvesting,” where individuals intentionally choose long-term renting over homeownership to maximize cash flow for stock market investments.

Proponents point to immediate portfolio growth and liquidity, while critics warn the strategy fails without absolute financial discipline.