Buying More Affordable than Renting in 53% of Housing Markets
ATTOM Data Solutions, Irvine, Calif., said its 2020 Rental Affordability Report showed owning a median-priced, three-bedroom home is more affordable than renting a three-bedroom property in 455, or 53 percent, of the 855 U.S. counties analyzed.
However, the analysis of HUD, Bureau of Labor Statistics and its own data shows a split between different-sized markets, with ownership more affordable mainly in lightly populated counties and renting more affordable in more populous suburban or urban areas.
“Home ownership is a better deal than renting for the average wage earner in a slim majority of U.S. housing markets,” said Todd Teta, chief product officer with ATTOM Data Solutions. “However, there are distinct differences between different places, depending on the size and location from core metro areas. For sure, either buying or renting is a financial stretch or out of reach for individual wage earners throughout most of the country in the current climate. But with interest rates falling, owning a home can still be the more affordable option, even as prices keep rising.”
The report said renting is more affordable than buying a home in 94, or 69 percent, of the 136 counties in the report that have a population of at least 500,000 or more. Renting is the more affordable option in 36 of the 43 counties with a population of at least 1 million or more (84 percent), including Los Angeles County; Cook County (Chicago); Harris County (Houston); Maricopa County (Phoenix); and San Diego County.
Other key findings:
–Renting a three-bedroom property requires an average of 37.6 percent of weekly wages across the 855 counties analyzed for the report. Least affordable markets for renting are Santa Cruz County, Calif. (82.1); Marin County, Calif. (75.3 percent); Park County, Colo. (74.3 percent); Honolulu County (74.2 percent) and Kauai County, Hawaii (73.7 percent).
–Median home prices rose faster than average fair-market rents in 575 of the 855 counties analyzed in the report (67.3 percent).
–Average rents rose faster than median prices in 280 counties (32.7 percent).
–Median home prices rose faster than average weekly wages in 567 of the 855 counties analyzed in the report (66.3 percent.
–Average weekly wages rose faster than median home prices in 288 counties (33.7 percent.
–Wages rose faster than average fair market rents in 484, or 56.6 percent, of the counties analyzed in the report.
–Average rents rose faster than average wages in 371, or 43.4 percent, of counties in the report.
