Buying a home is more affordable than renting one in more than 66 per cent of the counties of US housing market, revealed in a survey conducted by ATTOM Data Solutions – a provider of real estate and property data.
The analysis includes fair market rent data for 2017 from the Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics and public record sales deed data from RealtyTrac in 540 US counties with minimum of 900 sales in 2016.
To calculate rental affordability, average monthly wage was used as a percentage of average fair market rent for a three-bedroom property whereas for home buying affordability, average monthly wage was used as a percentage of the monthly house payment for a median-priced home. The used data of monthly housing payments incorporates 3 percent of down payment, mortgage payments, property taxes and insurance. Across all countries, the monthly fair market rent will need 38.6 per cent average wages but a monthly house payment on a median-priced home requires 36.6 per cent of average wages.
Cook County (Chicago), Illinois, Maricopa County (Phoenix), Arizona, Clark County (Las Vegas) and Nevada are included in 354 counties which has affordable housing payment whereas there are total of 186 counties including Los Angeles, San Diego, Santa Clara County (San Jose) and New York where rental payments are more affordable.
“While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017,” says Daren Blomquist, Senior VP, ATTOM Data Solutions.
“Renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year. Additionally, renting may end up being the lesser of two housing affordability evils in a growing number of high-priced markets.” He adds.
Source: World Property Journal