“With rental affordability outpacing home affordability in the majority of U.S. housing markets, and home prices rising faster than rental rates, the American dream of owning a home, may be just that — a dream.” — Jennifer von Pohlmann, director of content at ATTOM
Renting is cheaper than buying a home in a majority of the largest U.S. counties, according to a recent ATTOM Data Solutions study on rental affordability.
Renting a three-bedroom home is more affordable than buying a median-priced home in 442 of 755 U.S. counties — roughly 59 percent — that were analyzed for ATTOM’s 2019 Rental Affordability Report. The broad study incorporated fair market rent data for 2019 from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics and public record sales deed data from ATTOM in 755 U.S. counties with sufficient home sales data, the real estate analytics company said.
“With rental affordability outpacing home affordability in the majority of U.S. 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. “With home price appreciation increasing annually at an average of 6.7 percent in those counties analyzed for this report and rental rates increasing an average of 3.5 percent, coupled with the fact that home prices are outpacing wages in 80 percent of the counties, renting a home is clearly becoming the more attractive option in this volatile housing market.”
Investors should be aware of markets in which renting is a more affordable option as they can better focus their efforts according to their goals. Rental affordability can affect buying trends in these markets, too, which could entail that investors tweak strategies.
Renting is cheaper in the most populated cities
Renting is more affordable than buying a home in the United States’ 18 most populated counties, according to ATTOM. Renting is also cheaper in 93 percent of counties with a population of 1 million or more people, including Los Angeles County, California; Cook County, Illinois; Harris County, Texas; Maricopa County, Arizona, and San Diego County, California.
Buying a home is more affordable than renting in only three U.S. counties with a population of 1 million or more, including Wayne County, Michigan; Philadelphia County, Pennsylvania, and Cuyahoga County, Ohio.
Check out the buy or rent 2019 heat map below for more information on your markets.