Buying costs drop, while rents keep rising
The gap between the costs of buying a home vs renting one is shrinking. In fact, according to a new analysis, the monthly cost to buy fell over the last year, while costs to rent rose.Verify your new rate (Aug 15th, 2020)
Mind the gap
According to a new report from Realtor.com, the monthly cost gap between buying and rent has narrowed.
Over the last year, the costs to buy a house dropped 1% to $1,600. Meanwhile, rent costs increased 4%, hitting $1,319 per month.
The gap shrunk the most in high-cost markets like Santa Cruz County, Calif., and Kings and New York counties in New York state.
Here’s how George Ratiu, senior economist at Realtor.com, sums it up: “The move toward a more balanced equation is good news for home sellers during this spring homebuying season as more people, especially the large cohort of Millennials who turn 30 this year, begin to weigh the cost of buying versus renting.”
Buying a home is best in these counties
In 16% of all U.S. counties, buying a home is actually more affordable than renting.
In the last year, 26 counties moved from favoring renting to favoring buying, including some in the Cleveland, Indianapolis, and Bronx markets.
Clayton County, Ga. favors buying the most. There, it takes just 18% of a resident’s income to buy a house. To rent? It requires 32%.
Baltimore City, Md. also has a wide gap between buying a home and renting. Buying costs 23% of a resident’s income, while renting takes up 35%. Other counties that favor buying include Cumberland, N.J.; Richmond, Ga.; Vigo, Ind.; Wayne, Mich.; Muscogee, Ga.; Cambria, Pa.; Hampton City, Va.; and Jefferson, N.Y.Verify your new rate (Aug 15th, 2020)
Get today’s mortgage rates
Thinking of buying a home in one of these affordable counties? Shop around and see what mortgage rates you qualify for today.