ATTOM Data Solutions recently put out a report finding that in two-thirds of U.S. housing markets, owning a home is currently more affordable than renting. The 2021 Rental Affordability Report looked at the affordability difference between renting and owning a median-priced three-bedroom home across 915 U.S. homes.
The report used data from the U.S. Department of Housing and Urban Development, as well as wage data from the Bureau of Labor Statistics, along with public record sales deed data.
Increased affordability in owning instead of renting is most found in suburban and rural areas, while renting is typically more affordable in bigger cities, according to the report. The following counties are areas where home prices are rising faster: Los Angeles, Calif.; Cook County, Ill.; Harris County, Texas; Maricopa County, Ariz.; and San Diego County, Calif. On the reverse, these counties have rents that are rising faster: Kings County, N.Y.; New York County, N.Y.; Bronx County, N.Y.; and Allegheny County, Pa.
Population has a lot to do with it. For example, ATTOM Data Solutions found that owning a home is more affordable in 50 percent of 94 counties with 500,000 to 999,999 people. And in 779 counties with a population less than 500,000, owning is more affordable across 65 percent of them. Affordability toward renting is more prominent among counties in the South and Midwest, led by Roane County, Tenn.; Benton County, Ark.; Madison County, Ala.; Green County, Ohio and Sullivan County, Tenn.
View a heat map that showcases where it’s more affordable to buy vs. rent here.
“Home prices are rising faster than rents and wages in a majority of the country. Yet, homeownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check,” said Todd Teta, chief product officer with ATTOM Data Solutions. “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. The coming year is totally uncertain, amid so many questions connected to the coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”