The gap between renting and buying has narrowed nationwide
The gap between renting and owning has seemed to narrow across the U.S.
The fourth quarter of 2019 saw rising rents, record-low mortgage rates and fluctuating home prices, making purchasing a home during this time more do-able compared to last year.
According to a report from realtor.com, it’s still more expensive to purchase a home than rent one in 84% of the nation’s larger counties.
The monthly cost to purchase a median-priced home in the U.S. during Q4 2019 was $1,600, while the median monthly rent was $1,319.
However, buying the median home accounts for an average of 30% of the national median income, while renting takes an average of 25%, according to the report.
Although renting is a favorable option for some, 84% of 593 U.S. counties analyzed still favor renting over buying, while 26 of those counties switched from being more affordable to rent in to being more affordable to buy in.
Realtor.com analyzed the top areas where buying is more affordable than renting, which included Clayton County, Georgia (Atlanta Metro area); Delaware County, Indiana (Muncie Metro area); and Baltimore City, Maryland (Baltimore Metro area).
To buy the national median-priced home in these areas is $1,600, or 30% of the national median household income.
Meanwhile, the monthly cost to buy is down 1% from the same time last year, when it was $1,658 and represented 31% of median household income.
The cost to rent increased 4% from $1,254 to $1,319, both representing 25% of the median household income that year.
There were 26 observed counties that turned around and became more affordable to rent than to buy, including the top five:
- Cuyahoga County, Ohio (Cleveland-Elyria, Ohio metro area)
- Bronx County, New York (New York-Newark-Jersey City, New York-New Jersey-Pennsylvania metro area)
- Marion County, Indiana; (Indianapolis–Carmel–Anderson, Indiana metro area)
- Camden County, New Jersey (Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland metro area)
- Richland County, South Carolina (Columbia, South Carolina metro area)
Renting a home is most favorable in New York, where it takes 117% of income to purchase a home, but 30% to rent.
Purchasing a home is most favored in Clayton, Georgia, where it takes 18% of income to purchase a home, but 32% to rent.
Where has the gap between renting vs. buying a home improved the most for purchasing a home? In Santa Cruz, California. There, a median home listing price sits at $909,550 and the median rent is $2,746.