While homeownership has gotten more expensive it is still more affordable than renting, according to a new report from ATTOM Data Solutions…(ATTOM)
- Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 58% of the country.
- This is true despite median home prices increasing more than average rents and more than average wages in 88% of the country.
While owning makes sense in 58% of the country, in the other 42% renting is more affordable and those places tend to be in the most populated counties…
- Renting is more affordable for average wage earners than buying in 21 of the nation’s 25 most populated counties.
- Renting is still the cheapest in the South and Midwest as they represented 43 of the 50 most affordable markets for renting.
NOTE: Homeownership is also most affordable in the South and Midwest despite record growth.
POTENTIAL PROBLEM: Wages are increasing more than average rents in 55% of the country and median homes prices are rising faster than weekly wages in 88% of the country.
While home price growth is expected to slow, it is not expected to stop. When you combine that with rising rates it’s not hard to see a scenario in a few quarters where owning becomes more affordable than renting in the majority of the country. This is why Ali Wolf, Chief Economist At Zonda, tweeted “All eyes will be on the monthly payment this year…”
However, if rents begin rising at a quicker rate than home prices then homeownership will remain the more affordable option. With rent occupancy rates hitting all-time highs it is very possible…
- Fully 97.5% of professionally managed apartment units are spoken for as of December, the highest figure on record, according to data from the property management software company RealPage…(Bloomberg)