There are stark gaps between rent and ownership costs
To buy a home or to rent? That is the question for many Americans.
For now, buying a home is cheaper in most parts of the country if someone can afford a down payment of 20%that often surpasses$200,000,according to a report byproperty-data firm ATTOM.
ATTOM said owning a typical single-family home takes up a smaller portion of average wages than renting a three-bedroom residencein nearly 60% of 341 big counties with enough data to review.
Either way, owning or renting typically takes 25% to60% of an average U.S. worker's wages, ATTOM said.
"The current situation is tenuous, especially if mortgage rates keep going back up like they have in the past couple of months," ATTOM CEO Rob Barber said.
There are some staggering affordability gaps between renting and owning a home across the U.S., the figures show.
Buying or renting a home in the U.S. these days can be like searching for a diamond in a pile of marbles, and its only getting worse in most markets as the cost of both goes up, Barber said.
For instance, in New York's Suffolk County, home ownership expenses for a typical single-family home would take 59% of average local wages after assuming a 20% down payment, versus 159% of wages for renting a three-bedroom home,ATTOM said.
And in Collier County in Naples, Fl., home ownership would cost 79% of wages compared with 127% for renting.
Around 34% of the large counties reviewed saw rent prices outpace the growth of home prices, including in counties where ATTOM said it'scheaper to buy such as Texas's Harris County, New York's Suffolk County and Ohio's Franklin County.
Residents of New Jersey's Atlantic County, where ATTOM saidit'scheaperto buy,saw a staggering spike of nearly 80% in rents for three-bedroom homesover a year, but only an increase of around 1.5% for single-family home sales prices.
Still, median prices for single-family homes over the past year grew faster than three-bedroom rent prices in 66% of the large counties reviewed, ATTOM said.
What parts of the U.S. are best for buying a home instead of renting?
Buying a home is more favorable than renting in the Midwest and South, followed by the Northeast.
Owning requires a smaller portion of average wages than renting in about 80% of the Midwest, 60% of the Southand about 50% of the Northeast, ATTOM said.
For example, owning takes up 15% of average local wages in Jefferson County,Birmingham, Al. and Wayne County,Detroit, Mich.
For counties with populations of 1 million or more people, the two places where it'smost affordable to own a home are Allegheny County in Pittsburgh, Penn. andCuyahoga County in Cleveland, Ohio., which would cost 21% of average local wages.
The West is an exception: Renting is a better financial choice in about 80% of the region, which includes Arizona, California and Oregon.
Below is a searchable table on the counties where it'scheaper to buy than rent a home.
Email Dieter Holger at This email address is being protected from spambots. You need JavaScript enabled to view it..
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-02-06 14:16:14
