Owning a Home Is Still More Affordable Than Renting One

Owning a Home Is Still More Affordable Than Renting One

If spending more time at home over the past year is making you really think hard

about buying a home instead of renting one, you’re not alone. You may be wondering,

however, if the dollars and cents add up in your favor as home prices continue to rise.

According to the experts, in many cases, it’s still more affordable to buy a home

than rent one. Here’s why.

ATTOM Data Solutions recently released the 2021 Rental Affordability Report, which

states:

“Owning a median-priced three-bedroom home is more affordable than renting a

three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed for

the report.

That has happened even though median home prices have increased more than

average rents over the past year in 83 percent of those counties and have risen more

than wages in almost two-thirds of the nation.”

How is this possible?

The answer: historically low mortgage interest rates. Todd Teta, Chief Product

Officer with ATTOM Data Solutions, explains:

“Home-prices are rising faster than rents and wages in a majority of the country.

Yet, home ownership is still more affordable, as amazingly low mortgage rates that

dropped below 3 percent are helping to keep the cost of rising home prices in

check.”

In 2020, mortgage rates reached all-time lows 16 times, and so far, they’re continuing to

hover in low territory this year. These low rates are a big factor in driving affordability.

Teta also notes:

“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 home

ownership. 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.”

Bottom Line

If you’re considering buying a home this year, let’s connect today to discuss the options

that match your budget while affordability is in your favor.