Renting is Still More Affordable Than Owning


Rising home prices—along with high mortgage rates and inflation—have created a strong challenge of affordability in the housing market. 

It’s grown to the point where renting has become the favored choice amongst the masses because average wages will no longer cover the costs of homeownership. In fact, renting and owning a three-bedroom home consumes more than one-third of the average workers’ wages in the vast majority of county-level housing markets, according to a new report from ATTOM.

ATTOM’s 2024 Rental Affordability Report found that median rental rates still require a smaller portion of average wages than major home-ownership expenses on three-bedroom properties in 296 (88%) of the 338 counties.

In almost three-quarters of markets with populations of at least 1 million, the portion of average local wages consumed by renting is at least 10 percentage points lower than the portion required for typical major home ownership expenses. (Comparisons assume a 20% down payment, and major ownership expenses include mortgage payments, property taxes and insurance).

Key highlights:

  • Median rents for three-bedroom homes have increased more over the past year, or declined less, than median prices for single-family homes in 210 (62%) of the 338 counties analyzed in this report. Changes in three-bedroom rents commonly have ranged from 3% decreases to 15% increases, while changes in median sale prices for single-family homes last year typically ranged from 3% losses to 7% gains.
  • Among 45 counties included in the report, the biggest gaps are in Honolulu, Hawaii (rents consume 67% of wages while a typical single-home consumes 134%); Kings County, New York (72 percent for renting versus 136 percent for owning); Alameda County, California (51% vs. 108%); Santa Clara County, California (29% vs. 83%) and Orange County, California (88% vs. 136%).
  • The report shows that the median three-bedroom rent requires more than one-third of the average local wage in 274 of the 338 counties analyzed for the report (81%).
  • Among the 64 markets where median three-bedroom rents require less than one-third of average local wages, 59 are in the Midwest and South.
  • The most affordable for renting are Jefferson County, Alabama (22%); Wayne County, Michigan (22%); Ingham County, Michigan (22%); Genesee County, Michigan (23%) and Caddo Parish, Louisiana (23%).
  • The least affordable counties for renting are spread mostly through the South and West, including Collier County, Florida (153%); Santa Barbara County, California (131%); Monterey County, California (107%); Indian River County, Florida (102%) and Riverside County, California (101%).
  • The report shows that major expenses on a median-priced single-family homes require more than one-third of average local wages (assuming a 20% down payment) in 296 of the 338 counties analyzed for the report (88%).
  • The most affordable markets for owning are Wayne County, Michigan (19%); Montgomery County, Alabama (21%); St. Louis City/County, Missouri (23%); Bibb County, Georgia (23 percent) and Caddo Parish, Louisiana (23%).
  • The least affordable markets for owning among those analyzed are Marin County, California (164%); Santa Cruz County, California (160%); Orange County, California (136%); Kings County, New York (136%) and Honolulu County, Hawaii (134%).
  • Median three-bedroom rents are increasing more than average local wages in 197 of the 338 counties analyzed in the report (58%). They include Los Angeles County, California; Harris County, Texas; Maricopa County, Arizona; San Diego County, California, and Orange County, California.
  • Average local wages are growing faster than average rents in 141 of the counties in the report (42%), including Cook County, Illinois; Kings County, New York; Miami-Dade County, Florida; Queens County, New York, and San Bernardino County, California.
  • Average weekly wages are rising faster than median home prices in 197 of the 338 counties in the report (58%), reversing a pattern seen in 2023. They include Los Angeles County, California; Cook County, Illinois; Harris County, Texas; Maricopa County, Arizona, and San Diego County, California.
  • Median home prices are rising faster than average weekly wages in 141 of the counties analyzed in the report (42%). 
  • Median home prices are rising faster than average weekly wages in 141 of the counties analyzed in the report (42%), including Orange County, California; Kings County, New York; Miami-Dade County, Florida; Broward County, Florida, and Middlesex County, Massacchusetts.

Major takeaway:

“Finding an affordable home remains a daunting prospect around the country for average workers, regardless of whether they want to buy or rent. Continuously increasing home prices contribute to the escalation of rental costs, making both buying and renting properties a challenging endeavor across most of the United States.,” said Rob Barber, CEO at ATTOM. “But the latest data shows that even as rents are growing faster, they remain more affordable than owning.”

For the full report, click here.





Source link

About The Author

Scroll to Top