Owning a Home Is Still More Affordable Than Renting One

Posted on

Feb 25, 2022

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If spending more time at home over the past year is making you really think hard aboutbuyinga home instead of renting one, youre not alone. You may be wondering, however, if the dollars and cents add up in your favor as home prices continue torise. According to the experts, in many cases,its still more affordable to buy a home than rent one. Heres why.

ATTOM Data Solutionsrecently released the2021 Rental Affordability Report, which states:

Owninga median-priced three-bedroom homeis more affordable than rentinga three-bedroom property in 572, or63 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 interestrates. Todd Teta,Chief Product OfficerwithATTOM 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 amazinglylow mortgage ratesthat dropped below 3 percentare helping to keep the cost of rising home prices in check.

In 2020, mortgage rates reached all-time lows16 times, and so far, theyre continuing to hover in low territory thisyear. These low rates are a big factor in driving affordability. Teta also notes:

Its startling to see that kind of trend. Butit 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 youre considering buying a home this year, lets connect today to discuss the options that match your budget while affordability is in your favor.

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