Despite home prices reaching record highs, homeownership is still more affordable than renting in 58% of counties.
According to ATTOM, owning a median-priced home is less expensive than renting a three-bedroom property in 666 out of 1,154 counties studies in the 2022 Rental Affordability Report. Despite home prices rising in 88% of these counties, it still remains more affordable to buy a home than rent. Only 12% of counties reported wage growth moving faster than median home prices and Allegheny County was one market named were average weekly wages are outpacing median home prices. The report found that suburbs and more rural areas tended to be more affordable to buy a home, while major metropolitan areas tended to be more affordable to rent.
Even as rent prices continue to skyrocket, two Pennsylvania counties were named to the top 10 list of the most affordable rentals in the U.S. Both Allegheny and Philadelphia counties offer rental prices that are more affordable to the average consumer. Renting the average three-bedroom property in Allegheny County costs 23.7% of average wages, while in Philadelphia County, it takes 29.3% of average wages. Interestingly, Allegheny County was also named as one of the largest counties in which rent prices are rising faster than home prices, meaning it may not be more affordable for renters for long. In 48% of counties, rent took up more than one-third of average local wages. However, the report also found that wage growth is moving faster than rent growth in 55% of markets.
“Home prices are rising faster than both rents and wages, while wages rise faster than rents. And the housing market boom of the past decade keeps pushing home values to new records. Yet homeownership 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,” said Todd Teta, chief product officer with ATTOM.