When it comes to affordability, homeownership across 63% of America is more cost-effective than renting, say researchers at ATTOM Data Solutions. However, ATTOM’s report showed that in the most populated urban markets, renting remains more affordable. ATTOM’s 2021 Rental Affordability Report shows that owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572 of the 915 U.S. counties analyzed for the report.
This is true despite median home prices that are rising more than average rents over the past year in 83% of those counties and which have risen more than wages in almost two-thirds of the nation.
“Home-prices are rising faster than rents and wages in the majority of the country. 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," said ATTOM's Chief Product Officer Todd Teta. “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.”
The report goes on to break down owning versus renting regionally—that’s where the researchers learned that ownership is more affordable in counties with a population of less than 1 million, especially among those with less than 500,000 people.
The report found most affordable rental markets in the South and Midwest and the least affordable in the West.
It found the most affordable places to own also is in the South and Midwest. The least affordable places to own are reportedly are in the West and Northeast.