"To own or to rent?" It's a question that has to be considered every time someone relocates. The map below compares the monthly payment for median-priced homes vs. the average rent on a three-bedroom property in counties with at least 500 sales from January to November 2021. The locations in green show where it is cheaper to buy and those in purple show where it is cheaper to rent. The reality? Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 58% of the U.S., according the new 2022 Rental Affordability Report from ATTOM .
Here are a few interesting tidbits to wrap your brain around:
- The more populous a county, the more likely it is that renting will be cheaper than owning, and vice versa.
- The most affordable homeownership markets are in the South and Midwest, and the least affordable are in the West and Northeast.
- In nearly 90% of the nation, home prices are rising faster than wages, and more than average rents.
- The benefits of rising wages and super-low mortgage rates counteracted the effects of home prices spiking around the U.S.
Todd Teta, the chief product officer with ATTOM, explains that, “The trend is slowly shifting toward renters, which could be a major force in easing price increases in 2022. Prices can only go up by so much more before renting becomes financially easier. For now, though, rising wages and interest rates around 3 percent are enough to offset recent price runups and keep ownership on the plus side of the affordability ledger compared to renting.”
Renting is more affordable for average wage earners than buying a home in 21 of the nation’s 25 most populated counties and in 35 of 42 counties in the report with a population of 1 million or more (69 percent). Other counties with a population of more than 1 million where it is more affordable to rent than to buy include locations in the Dallas, Miami, New York City, San Francisco, Washington, D.C., and Riverside, CA, metropolitan areas.
See below for additional recent insights on housing:
Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 58% of the U.S., a new report says. There's a big city/suburban divide, though: Renting makes more sense in big metropolitan areas, while homeownership wins out in rural areas and suburbs, where property prices are lower. Why it matters: Even with home prices continuing to climb, the affordability gap is narrowing, which may signal the imminent end to what's been a steady run-up in home prices.