Buying more affordable than renting in majority of housing markets
When it comes to purchasing a home vs. renting on the affordability continuum, the reasonably priced properties skew towards less populated areas, according to Attom Data Solutions.
Owning a median priced three bedroom house is more affordable to the average wage earner than renting that same property in 53% of the 855 counties analyzed in Attom's 2020 Rental Affordability Report. This follows in line with the data provider's latest Home Affordability Report.
"Homeownership is a better deal than renting for the average wage earner in a slim majority of U.S. housing markets. However, there are distinct differences between different places, depending on the size and location from core metro areas," Todd Teta, chief product officer with Attom Data Solutions, said in a press release. "For sure, either buying or renting is a financial stretch or out of reach for individual wage earners throughout most of the country in the current climate. But with interest rates falling, owning a home can still be the more affordable option, even as prices keep rising."
Size matters. Purchasing a home is only more financially feasible in 16% of counties with populations of 1 million or more. Among those highly populated areas, Miami-Dade County, Fla.; its neighbor to the north, Broward; Wayne County, Mich.; Philadelphia, Pa.; and Hillsborough County, Fla; led the way in purchase affordability compared to renting.
Average weekly wage growth outpaced home price appreciation in 33.7% of the counties in the study. Among these were three neighboring Southern California counties: Los Angeles, Orange and San Diego; along with Cook County, Ill.; and Brooklyn, N.Y.'s Kings County.
On the flip side, median home prices grew faster than wages in the remaining 66.3% counties. Notably, Harris County, Texas; Maricopa County, Ariz.; Miami-Dade; Riverside County, Calif.; and another part of New York City, Queens County; were among them.
Similarly, median home prices grew faster than the average fair-market rent in 67.3% of the 855 counties, including Harris County; San Bernardino County, Calif.; Bexar County, Texas; Wayne County; and Philadelphia.