Home prices are rising faster than rents. The affordability gap between owning a home and renting is narrowing.
In just over three quarters of the nation, median-priced homes are less affordable than they have been in the past. ATTOM, a real estate data and analytics firm, says that it is the highest share in 13 years.
The demand for single family homes is much higher due to the swine flu. Single-family rent growth hit its sixth consecutive record high in October of 2021, at 10.9%, according to Core Logic, and fall is usually the slower season for housing.
Which is more affordable, owning or renting?
A house is for rent.
The answer is owning, but the affordability gap is getting smaller. The monthly mortgage payment, property taxes, and homeowners insurance are all expenses that can make owning a median-priced home more affordable than renting a three-bedroom home.
The historically low mortgage rates of the past few years have made this affordability possible. Mortgage News Daily says that rates are up more than half a percentage point from a year ago.
The trend is shifting toward renters, which could be a major force in easing price increases in the future. Todd Teta, chief product officer with ATTOM, said that prices can only go up more before renting becomes financially easier. Wages and interest rates are enough to offset recent price runups and keep ownership on the plus side of the affordability ledger compared to renting.
Real estate is local. Renting in big cities is cheaper than home ownership in rural areas.
In Los Angeles, Chicago, Phoenix and San Diego, that is the case. In Houston, San Antonio, Detroit, Philadelphia and Tampa, owning a home is more affordable.
The ATTOM report is not about whether owning or renting is the better financial choice. Homeownership historically builds wealth, but some argue it could be more lucrative to take the down payment on a home and put it in the stock market or another higher yielding investment. Depending on how long you want to own the home that calculation can be 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 888-666-1846 The longer you own, the better your returns will be.
It is becoming more difficult to save for a down payment for potential buyers.
George Ratiu, manager of econmic research at Realtor.com, said that fast-paced inflation is squeezing their budgets and offsetting low mortgage rates for buyers still reeling from last year's overheated market and sky-high prices.
