IRVINE, Calif. – Jan. 5, 2017 – ATTOM Data Solutions just-released 2017 Rental Affordability Report finds that it's cheaper to buy a home than rent one in two out of three (66 percent) U.S. metro areas studied. The report found monthly house payments on a median-priced home – including mortgage, property taxes and insurance – is more affordable than the fair market rent on a three-bedroom property in 354 of the 500 counties analyzed in the report.
"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 vice president with ATTOM Data Solutions, the new parent company of RealtyTrac. "In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year."
Blomquist says rising mortgage rates could make renting "the lesser of two housing affordability evils in a growing number of high-priced markets."
Only a handful of Florida metro areas have rents low enough that they compare favorably to homeownership, and most of those are in Key West, Southwest Florida or upscale suburbs to major cities.
In Florida, only a handful of metro areas where low-enough rents coupled with higher home prices and mortgage rates high enough to make renting.
Florida metros where ATTOM finds it's less expensive to rent than buy a home:
- Crestview-Fort Walton Beach-Destin
- Jacksonville metro areas in Nassau and St. Johns counties
- The Villages in Sumter County
- Port St. Lucie
- Cape Coral-Fort Myers
- Naples-Immokalee-Marco Island
- Key West
An interactive map that displays buyer vs. rent metro areas in the U.S. and Florida is posted on ATTOM's website.
Markets where it's more affordable to buy than rent
Among the nation's most populous counties, those where it is more affordable to buy than to rent are Cook County (Chicago), Illinois, Maricopa County (Phoenix), Arizona, Miami-Dade County, Florida; San Bernardino County, California in inland Southern California; Clark County (Las Vegas), Nevada; Tarrant County, Texas in the Dallas metro area; Wayne County (Detroit), Michigan; Broward County, Florida in the Miami metro area; Bexar County (San Antonio), Texas; and Philadelphia County, Pennsylvania.
Markets more affordable to rent than buy
Counter to the overall trend, renting is more affordable than buying a home in 186 of the 540 counties analyzed for the report (34 percent), including Los Angeles County, California; Harris County (Houston), Texas; San Diego County, California; Orange County, California; Kings County (Brooklyn), New York; Dallas County, Texas; Queens County, New York; Riverside County, California in the inland area of Southern California; King County (Seattle), Washington; and Santa Clara County (San Jose), California.
On average across 540 counties analyzed, monthly fair market rent on a three-bedroom property in 2017 requires 38.6 percent of average wages, while a monthly house payment on a median-priced home (including mortgage, property taxes and insurance) requires 36.6 percent of average wages on average.
Least affordable rental markets
The least affordable rental markets requiring the highest percentage of average wages to pay fair market rent in 2017 are Marin County, California in the San Francisco metro area (77.3 percent); Spotsylvania County, Virginia in the Washington, D.C. metro area (73.7 percent); Monroe County (Key West), Florida (72.2 percent); Honolulu County, Hawaii (70.7 percent); and Maui County, Hawaii (70.6 percent).
In 55 counties, the average fair market rent on a three-bedroom property in 2017 will require more than 50 percent of average wages, including Kings, Queens, Suffolk, Bronx and Nassau counties in the New York metro area; Contra Costa and Alameda counties in the San Francisco metro area; and Orange and San Diego counties in Southern California.
Most affordable rental markets
The most affordable rental markets requiring the lowest percentage of average wages to pay fair market rent in 2017 are Madison County (Huntsville), Alabama (23.9 percent); Allegheny County (Pittsburgh), Pennsylvania (24.4 percent); Fulton County (Atlanta), Georgia (24.8 percent); Anderson County (Knoxville), Tennessee (25.1 percent); and Rock Island County, Illinois (25.3 percent).
Rents and home prices rising faster than wages in most markets
Median home prices are rising faster than fair market rents in 340 of the 540 counties analyzed (63 percent), and fair market rents are rising faster than median home prices in 200 of the 540 counties analyzed (37 percent).
© 2017 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.