Renting Less Affordable Than Home Ownership in Most U.S. Markets
Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 58 percent of U.S. counties, reported ATTOM, Irvine, Calif.
The ATTOM 2022 Rental Affordability Report found home ownership remains more affordable than renting even though median home prices have increased more than average rents and more than averages wages in 88 percent of the 1,154 counties analyzed.
“Home prices are rising faster than both rents and wages while wages rise faster than rents,” said Todd Teta, Chief Product Officer with ATTOM. “And the housing market boom of the past decade keeps pushing home values to new records. Yet home ownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.”
Teta noted this trend is slowly shifting toward renters, which he said could be a “major force” in easing price increases this year. “[House] prices can only go up by so much more before renting becomes financially easier,” he said. “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.”
Trends favoring home ownership show up mostly in less-populous suburban and rural areas with the most affordable home values, while renting remains more affordable in the biggest metropolitan areas, ATTOM said. Renting is more affordable for average wage earners than buying a home in 21 of the nation’s 25 most populated counties. While renting is more affordable in a majority of counties with populations between 500,000 and one million, home ownership is the more viable option in counties with a population below 500,000 and especially in markets with fewer than 100,000 residents, the report said.