Renting a home is more affordable than buying in over half of housing markets in the United States, a new analysis shows, with prices rising faster than rents.
In some 59% of markets it is cheaper to rent, according to the research that looked at the cost of a typical three bedroom property in terms of buying or renting, the report from real estate firm ATTOM data solutions shows.
Renting is more affordable than buying a home in the nation’s 18 most populated counties and in 37 of 40 counties with a population of a million or more, including Los Angeles, Cook County in Chicago, Harris County in Houston, Maricopa County in Phoenix and San Diego.
Other markets with a population of more than a million where it is more affordable to rent than to buy a home included counties in Miami, New York City, Seattle, Las Vegas, San Jose, San Francisco and Boston.
Among the 40 counties analysed in the report with a population of a million or more, the three where it is more affordable to buy a home than rent were Wayne County in Detroit, Philadelphia County in Pennsylvania and Cuyahoga County in Cleveland.
‘With rental affordability outpacing home affordability in the majority of US housing markets, and home prices rising faster than rental rates, the American dream of owning a home, may be just that, a dream,’ said Jennifer von Pohlmann, director of content at ATTOM Data Solutions.
‘With home price appreciation increasing annually at an average of 6.7% in those counties analysed for this report and rental rates increasing an average of 3.5%, coupled with the fact that home prices are outpacing wages in 80% of the counties, renting a home is clearly becoming the more attractive option in this volatile housing market,’ she pointed out.
The least affordable markets for renting are Santa Cruz in California, Honolulu, Spotsylvania County in Virginia, Maui County in Hawaii , San Benito in California, Monroe County in Florida, Sonoma County and Marin County, both in California, and Kings County in New York.
The most affordable markets for renting are Roane County in Tennessee, Peoria County in Illinois, Mcminn County in Tennessee, Green County in Dayton, Ohio, and Rhea County, also in the Dayton area.
Among counties with a population of a million or more, those most affordable for renting are Allegheny County in Pittsburgh, Cuyahoga County in Cleveland, Saint Louis County in Missouri, Oakland County in Detroit and Wayne County, also in Detroit.
Average fair market rents rose faster than median home prices in 224 of the 755 counties analysed in the report, including Los Angeles, San Diego, Orange County in California, Miami-Dade County, Dallas, and Kings County in Seattle.