Owning a home is still more affordable than renting in almost two-thirds of U.S. markets, according to a new report from Attom Data Solutions.
In 572 of the 915 counties — 63% — analyzed in Attom’s report, it’s less expensive to own a median-priced three-bedroom home than it is to rent a three-bedroom property. This is the case even though, during the past year, median home prices rose more than average rents in 83% of those counties and have risen faster than wages in nearly two-thirds of the country.
Escalating prices have thus far been offset by the historically low rate environment, according to Todd Teta, Attom’s chief product officer.
“Home-prices are rising faster than rents and wages in a majority of the country,” Teta said. “Yet, homeownership is still more affordable, as amazingly low mortgage rates that dropped below 3% are helping to keep the cost of rising home prices in check.
“It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and homeownership.”
Despite the headline figure, there is a strong geographical divergence when comparing where it’s cheaper to rent and buy. Renting remains the more affordable option in the United States’ dense metros, including 18 of the 25 most populous counties in the country. The same is true in 29 of 44 counties with at least 1 million residents, including counties within the metropolitan areas of Los Angeles, Chicago, Houston, New York, Seattle, Dallas, San Francisco and Boston.
Homeownership trends as the more cost-efficient choice the farther you stray from urban cores and head toward suburban and rural areas with affordable home values. Among 779 counties with a population less than 500,000, owning is more affordable in 510. The largest counties of this group are Greenville County, South Carolina; Adams County (outside Denver), Colorado; and Lake County (Gary), Indiana.
Some outliers do exist. For example, it’s cheaper to buy than rent in Maricopa County (Phoenix), Arizona; Miami-Dade County, Florida; and Clark County (Las Vegas), Nevada, despite each of those counties having a population of 1 million or more. And owning is more affordable in half of the counties with between 500,000 and 999,999 people, including St. Louis County, Missouri; Pinellas County (Tampa), Florida; Milwaukee County, Wisconsin; and Marion County (Indianapolis), Indiana.
Attom’s analysis was based on recently released 2021 fair market rent data 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’s records.