Is Owning More Affordable Than Renting?
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.