Homeownership Costs Are 15% More Than Apartments
And they exceed 12% than the costs experienced by single-family home renters.
Whether renters or homeowners, many Americans are confronting a lack of affordable housing options. Homeowners are at a special disadvantage because the share of household income that is being consumed by the cost of owning a home compared to renting makes homeownership a relatively more expensive proposition, according to a report by the data analytics company Markerr.
The data covers 118 million households, or 92% of the 127.5 million occupied households in the U.S., made up of 84 million homeowners and 43.5 million renters.
The cost of homeownership is calculated by including not only the monthly mortgage payment but also property taxes and repair and maintenance costs. For the nation’s 78 million homeowners in the sample, the average monthly cost was $2,407 and the cost to income ratio – which compares cost to monthly pre-tax income — was 38.1%.
By comparison, the average monthly rent for 26 million apartment renters was $2,103 or 34.4% of income. For 15 million renters of single-family homes, the average rent was $2,148 of 34.1% of income. In other words, the cost to homeowners was 15% more than for apartment renters and 12% more than for single-family home renters.
“The major change in affordability was in homeownership, with costs rising by over 50% since the beginning of 2022,” according to Markerr – an increase it said was driven primarily by a 360 basis-point rise in mortgage rates.
The national average, however, was meaningless in comparison to averages in specific metropolitan areas. The differences in cost of homeownership to income were starkest in California metros. In Los Angeles, the cost of homeownership was 81.9% of income and in San Diego 73.8%. In New York, apartment rent consumed 39.3% of income and homeownership 55.8%, and in Miami the comparable figures were 46% for apartment renters and 64.7% for homeowners. In Boston, apartment dwellers paid 35% of their income in rent and homeowners’ costs absorbed 53.4% of income.
The most affordable places to live included cities in Ohio. Nebraska, Kansas, Utah, Arkansas and Nebraska where rents averaged around 16 to 17% of income and homeowners’ costs were in the 25 to 31% share of income.