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Near 50-50 Split in Affordability For Renting vs. Homebuying

money in the pocket

Whether buying a home or renting a home is more affordable often depends on the type of market. While buying is the more affordable option in just a little more than half of U.S. counties, it tends to be the less affordable option in more dense metro areas, according to ATTOM Data Solutions’ latest Rental Affordability report

Overall, buying is more affordable in 53% of the 855 counties ATTOM Data Solutions tracks. 

Acknowledging the current affordable housing crunch, Todd Teta, Chief Product Officer at ATTOM Data, said, “For sure, either buying or renting is a financial stretch or out of reach for individual wage earners throughout most of the country in the current climate. But with interest rates falling, owning a home can still be the more affordable option, even as prices keep rising.” 

However, this isn’t always the case. 

Among counties with populations of at least 500,000, the scales tip in favor of renting. For 69% of these more populated counties, renting is the better option. 

For its survey, ATTOM compares the cost of purchasing a median-priced three-bedroom home to renting a three-bedroom property. The costs ATTOM includes for the comparison are a monthly mortgage payment, property tax, and insurance in comparison to the average fair-market rent for the area. 

For counties with a population of more than 1 million, renting is the clear choice 84% of the time. This is the case in such areas as Los Angeles County, California; Cook County, Illinois; and Harris County, Texas. 

A few exceptions include Miami-Dade County, Florida; Broward County, Florida; and Wayne County, Michigan—buying is more affordable in these counties. 

While home prices and rental prices are both on the rise in many markets, home prices are outpacing rents in 67% of counties, according to the ATTOM Data report. Some notable counties in this category are Harris County; San Bernardino County, California; Bexar County, Texas; Wayne County; and Philadelphia County, Pennsylvania. 

The most affordable rental markets tracked by ATTOM Data Solutions are Roane County, Tennessee; Steuben County, New York; Madison County, Alabama; Greene County, Ohio; and Sangamon County, Illinois. In all of these counties, the average rent is less than 30% of the average wages. 

A few counties with populations of at least 1 million also fell within this threshold, including Allegheny County, Pennsylvania; Cuyahoga County, Ohio; Fulton County, Georgia; Oakland County, Michigan; and Wayne County. 

The least affordable rental markets are Santa Cruz County, California; Marin County, California; Park County, Colorado; Honolulu County, Hawaii; and Kauai County, Hawaii. All of these markets require more than 73% of average wages to pay the rent on an average-priced three-bedroom property. 

The least affordable rental markets for counties with more than 1 million people are Kings County, New York; Orange County, California; San Diego County, California; Contra Costa County, California; and Queens County, New York. 

In a majority of markets home prices are growing faster than wages. This is the case for 66.3% of counties, while in the remaining 33.7% wages are rising faster than home prices. 

Things are looking a little better for renters in terms of wage growth. In 57% of markets wages are growing faster than rent prices. 

About Author: Krista F. Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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