SANTA CLARA, Calif.,
Jan. 29, 2020 /PRNewswire/ -- After
years of skyrocketing home prices, the combination of rising rents,
lower mortgage rates and moderating home prices are making
purchasing a home more attractive in many of the nation's largest
metros, according to realtor.com®'s quarterly Rent vs.
Buy report released today.
The report, which analyzed the cost of buying versus renting in
593 counties across the U.S., in the fourth quarter of 2019, found
that it was cheaper to buy than rent in 16 percent of the counties
with populations of 100,000 or more, up from 12 percent a year
earlier. Despite homeownership becoming more affordable, it is
still cheaper to rent than buy in 84 percent of the nation's
largest counties, including New York
City, San Francisco and
Los Angeles.
"The move toward a more balanced equation is good news for home
sellers during this spring home buying season as more people,
especially the large cohort of millennials who turn 30 this year,
begin to weigh the cost of buying versus renting," said
realtor.com® Senior Economist George Ratiu. "Due to a combination of factors,
we saw the monthly cost to buy a home fall 1 percent
year-over-year, while rents increased 4 percent during the same
time frame."
The monthly cost to buy the national median-priced home was
approximately $1,600, or 30 percent
of the national median household income, in the fourth quarter of
2019, in line with the budgeting rule of spending no more than 30
percent of gross income on housing costs. The cost to rent
increased to $1,319, representing 25
percent of the median household income in the fourth quarter of
2019.
Over the past year, 26 of the 593 counties analyzed shifted from
being more affordable to rent to being more affordable to buy,
including in the Cleveland,
Bronx County, N.Y., Indianapolis and Columbia, S.C, areas.
Although it is still cheaper to rent than buy, some of the
nation's most expensive housing markets, including Kings and
New York counties in N.Y., along
with Santa Cruz County, Calif.,
saw the gap between renting and buying decrease the most: by 24
percent, 20 percent, and 18 percent, respectively.
Counties Where Buying is More Attractive
The median listing prices in the counties where buying a home
was more affordable were on average 53 percent lower than the
national median listing price of $300,000. Median rents, while still less
expensive, were only 11 percent cheaper on average.
Rank
|
County
|
Percent of
Income to
Buy
|
Percent of
Income to
Rent
|
1
|
Clayton,
Ga.
|
18%
|
32%
|
2
|
Baltimore City,
Md.
|
23%
|
35%
|
3
|
Cumberland,
N.J.
|
21%
|
32%
|
4
|
Richmond,
Ga.
|
17%
|
28%
|
5
|
Vigo, Ind.
|
12%
|
22%
|
6
|
Wayne,
Mich.
|
18%
|
27%
|
7
|
Muscogee,
Ga.
|
20%
|
28%
|
8
|
Cambria,
Pa.
|
11%
|
19%
|
9
|
Hampton city,
Va.
|
22%
|
30%
|
10
|
Jefferson,
N.Y.
|
24%
|
31%
|
Counties Where Renting is More Attractive
The median listing prices in the counties where renting is more
affordable, were on average 260 percent higher than the national
median of $300,000. Median rents,
while also more expensive, were only 79 percent more expensive on
average.
Rank
|
County
|
Percent of
Income to
Buy
|
Percent of
Income to
Rent
|
1
|
New York,
N.Y.
|
117%
|
30%
|
2
|
Santa Barbara,
Calif.
|
116%
|
38%
|
3
|
Monterey,
Calif.
|
90%
|
31%
|
4
|
San Mateo,
Calif.
|
77%
|
31%
|
5
|
San Francisco,
Calif.
|
79%
|
33%
|
6
|
Marin,
Calif.
|
77%
|
33%
|
7
|
Napa,
Calif.
|
69%
|
28%
|
8
|
Los Angeles,
Calif.
|
77%
|
36%
|
9
|
Kings,
N.Y.
|
81%
|
42%
|
10
|
Maui,
Hawaii
|
64%
|
30%
|
Notes on Methodology
*Purchase and rent costs reflect current costs and do not take
into account holding period, price and rent appreciation, and
inflation. Purchase costs do include taxes and insurance and are
calculated based on realtor.com county-level residential listing
price data and mortgage rate data for December 2019. Rental prices are from the U.S.
Department of Housing and Urban Development (HUD) data for 2019
50th-percentile rent estimates. Household income data and
home-ownership data are from Census Housing Vacancies and
Home-ownership data and 2019 Claritas estimates are based on Census
data. Only counties with populations of 100,000 or greater are
included in the top lists in this analysis.
About realtor.com®
Realtor.com® makes buying, selling and living in
homes easier and more rewarding for everyone.
Realtor.com® pioneered the world of digital real estate
20 years ago, and today through its website and mobile apps is a
trusted source for the information, tools and professional
expertise that help people move confidently through every step of
their home journey. Using proprietary data science and machine
learning technology, realtor.com® pairs buyers
and sellers with local agents in their market, helping take the
guesswork out of buying and selling a home. For
professionals, realtor.com® is a trusted
provider of consumer connections and branding solutions that help
them succeed in today's on-demand world. Realtor.com® is
operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV]
subsidiary Move, Inc. under a perpetual license from the National
Association of REALTORS®. For more information,
visit realtor.com®.
Media Contact
Cody
Horvat - cody.horvat@move.com
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SOURCE realtor.com