It’s Still More Affordable to Buy Than Rent

In about two-thirds of the country – or 66 percent of the largest U.S. counties – it’s more affordable to buy a home than to rent one, according to a report by ATTOM Data Solutions.

They compared the monthly rents of three-bedroom apartments to monthly payments on median-priced homes (including the mortgages, property taxes, and insurance) across 540 counties.

“It feels like buying a home is getting tougher and tougher from an affordability standpoint,” says Daren Blomquist, ATTOM’s senior vice president. “But the low interest rates have really helped.”

Source: “Buying a Home May Be More Affordable Than You Think,” realtor.com® (Jan. 5, 2017) and ATTOM Data Solutions

Why Home Renters May Be in Trouble

The gap between rental costs and household income is widening to unsustainable levels across the country. As more renters face steeper costs, it may put them even further away from home ownership, according to the National Association of REALTORS®. NAR evaluated income growth, housing costs, and changes in share of renter and owner-occupied households over the past five years in metropolitan statistical areas.

Over the last five years, a typical rent rose 15 percent, while the income of renters grew by only 11 percent, according to research in a new study just released.

“Current renters seeking relief and looking to buy are facing the same dilemma: Home prices are rising much faster than their incomes,” says Lawrence Yun, NAR’s chief economist.  “With rents taking up a larger chunk of household incomes, it’s difficult for first-time buyers – especially in high-cost areas – to save for an adequate down payment.”

“The result has been an unequal distribution of wealth as renters continue to feel the pinch of increasing housing costs every year,” according to NAR’s study.

Source: National Association of REALTORS®