Would your clients rather own a median-priced three-bedroom home or rent a three-bedroom property?
If they’d prefer homeownership, in 63% of U.S. counties (out of 915), it is cheaper than renting, according to a new report from ATTOM Data Solutions. This is despite consistently rising home prices and a decrease in rent costs due to the pandemic, thanks in part, to historic low mortgage rates, the report found. On average, owning was cheaper than renting in suburban and rural areas, but renting was less expensive than owning in urban metros.
“Home prices are rising faster than rents and wages in a majority of the country. Yet, homeownership is still more affordable, as amazingly low mortgage rates that dropped below 3% are helping to keep the cost of rising home prices in check,” said Todd Teta chief product officer with ATTOM Data Solutions. “It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”
While this trend remains steady for now, the site reported that home prices are increasing quicker than rents in 83% of counties analyzed. However, wages are also seeing an uptick, in 81% of counties included in the study, wages are growing quicker than rent increases.
In Pittsburgh, rents are increasing faster than home prices, making the city still an affordable option for homebuyers. However, Pittsburgh’s rent was also applauded for being one of the most affordable in the U.S. Philadelphia was also named as being one of the most affordable larger counties in the nation to purchase a property.