Both owning and renting a home remain difficult for the average U.S., worker, but new data from ATTOM shows that owning a home is more affordable than renting a three-bedroom property in more than half of the county-level markets across the country.
Despite median home prices generally rising faster over the past year than average rents, owning is often the more affordable choice for those who can afford a down payment.
“Buying or renting a home in the U.S. these days can be like searching for a diamond in a pile of marbles, and it’s only getting worse in most markets as the cost of both goes up,” said ATTOM CEO Rob Barber. “However, in most parts of the country, homeownership is somewhat more attainable for those who can gather the necessary resources to cover down payments that often surpass $200,000.”
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On a regional basis, buying a residence is most affordable in the Midwest and South, followed by the Northeast, the report said. Owning requires smaller portions of average wages in about 80% of counties in the Midwest, 60% in the South and 50% in the Northeast.
Meanwhile, in the West, rentals are a financially easier choice, with renting more affordable in about 80% of the region’s markets.
Overall homeownership expenses require more than one-third of the average local wage in 68% of counties, but that pattern varies across the nation. Only about one-quarter of Midwest counties have home ownership costs exceeding one-third of wages thanks to some of the lowest home prices in the country. In other regions, between 66% and 98% of markets require more than one-third of average wages for home ownership costs.
A three-bedroom rental requires more than one-third of the average local wage in 76% of markets, with the Midwest ranking as the most affordable.
Meanwhile, the median price for a single-family home has increased more or declined less than the average three-bedroom rents over the past year in 66% of the 341 counties ATTOM analyzed. The most populous counties where median home prices have risen faster or declined less than average three-bedroom rent over the past year are Los Angeles County, California; Cook County, Illinois; Maricopa County, Arizona; and San Diego and Orange counties in California. The largest among the 34% of counties where changes in average three-bedroom rents have outpaced shifts in median prices are Harris County, Tarrant County and Bexar County, Texas; Suffolk County, New York; and Franklin County, Ohio.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
