Renting is getting cheaper than buying a house, report says – Harlem World Magazine

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According to a new analysis from Realtor.com, residents in three-quarters of the 50 largest housing markets would be better off continuing to rent than becoming first-time home buyers.

The researchers say the change took place in the first half of 2022, when mortgage rates almost doubled.

It’s not that the rents are cheap. But mortgage rates above 6% have simply made buying a home unaffordable for much of the population.

“With rents and home-for-sale prices hitting record highs in June, the rising cost of financing a home purchase stands out as the clear driver of rental affordability compared to typical rental costs. homeownership,” said Danielle Hale, chief economist at Realtor.com. .

With mortgage rates hovering around 3%, the cost of a monthly payment was very competitive with rent, which rose last year at roughly the same rate as house prices.

“While more markets offered relative rental affordability in June than in January, rents continue to rise across the country,” Hale said. “Additionally, many of the areas that have favored rentals are among the larger tech cities, where real estate tends to be at a premium.”

Median rental price hit record high in June

The median price of a rental in the United States hit a new high for the 16th straight month in June, but it was still cheaper than the monthly cost of owning a home. Although home sales prices also hit several record highs in the first half of the year, Realtor.com’s June analysis found that mortgage rate hikes were the main driver behind the widening of the market. affordability gap between renting and buying a first home.

In June, it cost $1,876 per month to rent a typical house or apartment. This is an increase of 14.1% over 12 months.

People buying their first home faced homeownership costs that were almost 30% higher than rents in June. The typical monthly cost of ownership was around $2,437. Realtor.com estimates that rising mortgage rates added about $416 to the average monthly home payment in June.

Erik Wright, CEO of New Horizon Homebuyers in East Tennessee, said people deciding whether to buy or rent should carefully calculate the numbers.

“I think the most important consideration is what you can afford for a monthly payment based on current interest rates,” Wright said. “The price you can pay for a house has probably changed a lot since the days when interest rates were around 3%.”

Major markets prefer renting to buying

Realtor.com analysis suggests that renting is the best choice in major markets. The nation’s biggest tech cities accounted for eight of the top 10 metros in June that favored renting over buying. This list was led by Austin, where the monthly cost of homeownership was 97.8% higher than the median rental price. In all of the top 10 markets, renting was at least 52% more affordable than a first-time purchase.



Only 11 metropolitan areas favored buying a first home over renting in June. It was cheaper to rent a house in Cincinnati than to buy one in January, but the economy turned around in the first half. In June, monthly costs for a first home in Cincinnati were $14 below rental prices.

Pittsburgh is the most economical rental market in the top 50, with ownership costs on average 33% lower than rental costs. It is followed by Birmingham and St. Louis.

Photo credit: source Harlem.

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