Owning a Home Is Still More Affordable Than Renting One

Dated: January 20 2021

Views: 21

Owning a Home Is Still More Affordable Than Renting One

Owning a Home Is Still More Affordable Than Renting One | MyKCM

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.

Blog author image

Alex Ortiz

I started my real estate journey in 2001 as an assistant and in 2004 earned my Real Estate License. Since then I have gone through my own buying and selling experience, became an entrepreneur in vario....

Latest Blog Posts

Tips for Single Homebuyers: How To Make Your Dream a Reality

Tips for Single Homebuyers: How To Make Your Dream a RealityIf you’re living on your own and looking to buy a home, know that you can make your dream a reality with thoughtful

Read More

How To Think Strategically as a Buyer in Today’s Market

How To Think Strategically as a Buyer in Today’s MarketThe game of chess can provide incredible lessons to apply to all aspects of life, including the homebuying process. Chess requires you to

Read More

Home Is Where the Heart Is More than Ever This Year

Home Is Where the Heart Is More than Ever This YearThere’s no denying the financial benefits of homeownership, but what’s often overlooked are the feelings of gratitude,

Read More

Why Now Is a Great Time To Sell Your House

Why Now Is a Great Time To Sell Your HouseAs we near the end of the year, more homeowners are realizing the benefits of today’s sellers’ market. Record-breaking home price

Read More