Dive Brief:
-
Purchasing a home is more affordable than renting in 66% of U.S. housing markets, according to Attom Data Solutions' 2017 Rental Affordability Report. Among the leaders are: Cook County, IL; Maricopa County, AZ; Miami-Dade County, FL; San Bernardino County, CA; and Clark County, NV.
-
Monthly house payments on a median-priced home, including mortgage, property taxes and insurance, are more affordable than the fair market rent on a three-bedroom property in 354 of the 540 counties analyzed. The counties included in the survey reported more than 900 home sales last year.
-
The report warned that although buying continues to be more affordable than renting in many U.S. markets, that could change if mortgage rates continue to rise.
Dive Insight:
Although mortgage rates have risen in recent months, industry participants note that they are still near historical lows and attractive for potential homebuyers looking to enter the market. As evidence, purchase mortgage requests have held steady despite mortgage rates climbing post-election, according to a report last month from Zillow.
Meanwhile, rents nationwide continue to increase as rising home prices, driven by a shortage of inventory, sideline many potential buyers and push them to rentals.
According to apartment finder Zumper, the national median rent increased 2.6% in January from the same period last year, despite a drop in rental prices in some of the country’s largest markets. Renting is more affordable than homeownership in roughly one-third of U.S. housing markets, Attom Data Solutions found. Those include: Los Angeles County, CA; Harris County, TX; San Diego County, CA; Orange County, CA; and Kings County, NY.
Concerns are growing, however, that a decision by the Federal Reserve last month to hike interest rates, with more increases planned for 2017, could further dampen the homebuying market.
For more housing news, sign up for our daily residential construction newsletter.