Current:Home > FinanceRent or buy a house? The gap is narrowing for affordability in the US-InfoLens
Rent or buy a house? The gap is narrowing for affordability in the US
View Date:2024-12-23 12:02:43
Yes, rents have soared in the past year, outpacing gains in home prices.
But it’s still more affordable to rent than own a home in nearly 90% of U.S. counties, according to a new report by ATTOM Data Solutions.
Both renting and owning pose heavy financial burdens, eating up more than one-third of wages in most of the country, the research firm says. The rule of thumb is that housing costs shouldn’t make up more than 30% of your gross income.
From January through November of last year, median rents for three-bedroom homes topped median single-family home price increases in 210, or 62%, of 338 counties with more than 100,000 residents and at least 100 sales, ATTOM figures show.
But while the gap has narrowed, renting still wins the affordability contest.
Learn more: Best personal loans
How much does it cost to rent vs. own a house?
In nearly three-quarters of markets with populations of at least 1 million, the share of average local wages consumed by rent is at least 10 percentage points lower than the portion required for home ownership, ATTOM says.
“Finding an affordable home remains a daunting prospect around the country for average workers, regardless of where they want to buy or rent,” says ATTOM CEO Rob Barber. “But the latest data shows that even as rents are growing faster, they remain more affordable than owning.”
ATTOM analyzed rents, home prices, local wages and mortgage rates, figuring mortgage payments based on a 20% down payment. Since the Federal Reserve began raising interest rates in early 2022, the average 30-year mortgage has skyrocketed, though it has fallen somewhat since peaking near 8% in early November.
What percentage of the paycheck goes to rent?
Among 45 counties with populations of at least 1 million, the biggest gap between renting and owning is in Honolulu, where median rents consume 67% of average local wages while typical single-family homes demand 134% of local paychecks. That’s followed by Brooklyn, New York (72% for renting vs. 136% for owning); the Oakland, California, area (51% for renting vs. 108% for owning); San Jose, California (29% for renting vs. 83% for owning); and Orange County, California (88% for renting vs. 136% for owning)
The only two counties with populations of more than 1 million where it’s more affordable to buy than rent are Riverside County, California (101% for renting vs. 91% for owning) and the Detroit area (22% for renting vs. 19% for owning).
More broadly, there are 64 markets where median three-bedroom rents require less than one-third of local wages, and 59 are in the Midwest and South.
Besides Detroit, they include the Birmingham, Alabama, area; the Shreveport, Louisiana, area ; the Cleveland area; and the Pittsburgh area.
Which part of the US has the least affordable rent?
The least affordable rental markets, which are largely in the South and West, include the Fort Myers, Florida, area; the Santa Barbara, California, area; and the Los Angeles area.
veryGood! (6811)
Related
- Angels sign Travis d'Arnaud: Former All-Star catcher gets multiyear contract in LA
- 4.7 magnitude earthquake outside of small Texas city among several recently in area
- Maren Morris Is Already Marveling at Beyoncé’s Shift Back to Country Music
- State governments looking to protect health-related data as it’s used in abortion battle
- Solawave Black Friday Sale: Don't Miss Buy 1, Get 1 Free on Age-Defying Red Light Devices
- Sistah Scifi is behind those book vending machines in Oakland and Seattle
- Plastic bag bans have spread across the country. Sometimes they backfire.
- Nordstrom's Presidents’ Day Sale Includes Deals up to 50% Off From SKIMS, Kate Spade, Free People, & More
- South Carolina does not set a date for the next execution after requests for a holiday pause
- New Jersey district settles sex abuse lawsuit involving former teacher for $6 million
Ranking
- Why Cynthia Erivo Needed Prosthetic Ears for Wicked
- Real Housewives of Beverly Hills Star Kyle Richards Influenced Me To Buy These 53 Products
- A man in Iran guns down 12 relatives in a shooting rampage with a Kalashnikov rifle
- Satellite shows California snow after Pineapple Express, but it didn't replenish snowpack
- Mike Tyson vs. Jake Paul VIP fight package costs a whopping $2M. Here's who bought it.
- Science experiment gone wrong sends 18 students, teacher to Tennessee hospital
- Judge expresses skepticism at Texas law that lets police arrest migrants for illegal entry
- You Won't Believe These Celebrity Look-Alikes Aren't Actually Related
Recommendation
-
Social media star squirrel euthanized after being taken from home tests negative for rabies
-
Millions of women are 'under-muscled'. These foods help build strength
-
GOP candidates elevate anti-transgender messaging as a rallying call to Christian conservatives
-
Albuquerque Police Department Chief crashes into vehicle while avoiding gunfire
-
PSA: Coach Outlet Has Stocking Stuffers, Gifts Under $100 & More for the Holidays RN (up to 60% Off)
-
Here's How to Craft Your Signature Scent by Layering Fragrances
-
Don’t Miss Kate Spade Outlet’s Presidents’ Day Sale Featuring Bags Up to 90% Off, Just in Time for Spring
-
This week on Sunday Morning (February 18)