Is Owning More Affordable Than Renting?

    Is Owning More Affordable Than Renting?

    Apr 29, 2020

    Despite high home prices, putting off a purchase to wait for a

    better deal may not be the best idea after all. Long-term owning is

    more affordable than renting almost anywhere in the country.

    Owning versus renting is significant. Median home prices are

    predicted to continue rising throughout 2020. There has been an

    8.05% increase in home prices nationwide over the past three years.

    Once the down payment is made, American homeowners will, on

    average, spend 25.1% of their monthly income on their housing.

    Looking at factors like the average monthly wages, monthly rents,

    monthly rental insurance payments and median home values, owning

    is more affordable than renting in 94.39% of cities in the U.S.

    As a result, those who can scrounge up enough cash for a down

    payment through savings, loans or family help will be at a clear

    financial advantage later on. High prices and the dearth of affordable

    homes on the market is still a major concern for first-time buyers and

    push many out of the buying market completely. Forty-four percent

    of millennials consider buying a home to be entirely out of reach,

    while many others are waiting for market conditions to change before

    they start the home buying process.

    Some of the most stark distinctions can be seen in Miami, where

    renters spend 66.7% of their monthly income on housing, while

    owners spend 34.6% on the same expense after the down payment is

    made. Denver has a dramatic difference: 51.4% for renters v. 31.6%

    for owners, respectively.

    

    Original article by Michigan Association of Realtors.