Renting a Home Still More Affordable Than Owning
Home Rental and Ownership Still Difficult in 2024 for Average Workers
By ATTOM Staff
ATTOM released its 2024 Rental Affordability Report, which shows that median three-bedroom rents in the U.S. are more affordable than owning a similarly-sized home in nearly 90% of local markets around the nation.
The report shows that both renting and owning a three-bedroom home continue to pose significant financial burdens for average workers, consuming more than one-third of their wages in the vast majority of county-level housing markets. But median rental rates still require a smaller portion of average wages than major home-ownership expenses on three-bedroom properties in 296, or 88%, of the 338 U.S. counties with enough data to analyze.
That gap extends trends from 2023 even as rents have commonly risen faster than home prices over the past year around the U.S.
“Finding an affordable home remains a daunting prospect around the country for average workers, regardless of whether they want to buy or rent. Continuously increasing home prices contribute to the escalation of rental costs, making both buying and renting properties a challenging endeavor across most of the United States.,” said Rob Barber, CEO at ATTOM. “But the latest data shows that even as rents are growing faster, they remain more affordable than owning.”
The current situation favoring renting over buying reflects a combination of housing market trends that offer limited straightforward options for home seekers but ultimately lean towards the advantage of rentals.
Over the past year, both rental rates and home prices have continued to rise in most of the country. Rental rates have climbed even faster in a majority of counties with enough data to analyze.
That has happened as elevated home prices have become further and further out of reach for average workers, preventing those with marginal finances from obtaining mortgages and leaving them with few options other than renting. Home prices kept going up in 2023 despite rising mortgage rates, in part because of a tight supply of homes for sale.
Still, despite renting and ownership consuming more than a third of average wages in most local markets, rents have not escalated enough to keep them from being the more affordable option for average workers. That trend has held throughout the country but remains most pronounced in the most populous urban and suburban markets.
Most populous counties have widest affordability gaps between renting and owning
Among 45 counties with a population of at least 1 million included in the report, the biggest gaps are in:
» Honolulu, HI (median three-bedroom rents consume 67% of average local wages while typical single-home affordability consume 134%
» Kings County (Brooklyn), NY (72% for renting versus 136% for owning)
» Alameda County (Oakland), CA (51% for renting versus 108% for owning)
» Santa Clara County (San Jose), CA (29% for renting versus 83% for owning)
» Orange County, CA (outside Los Angeles) (88% for renting versus 136% for owning)
Renting three-bedroom homes stretches budgets but remains most affordable in South and Midwest
Among the 64 markets where median three-bedroom rents require less than one-third of average local wages, 59 are in the Midwest and South.
Aside from Riverside County, the least affordable for renting among counties with a population of at least 1 million are:
» Orange County, CA (outside Los Angeles) (88% of average local wages needed to rent)
» Los Angeles County, CA (83%)
» Kings County (Brooklyn), NY (72%)
» Palm Beach County (West Palm Beach), FL (70%)
Most-affordable home ownership markets still in South and Midwest
The most affordable markets for owning are:
» Wayne County (Detroit), MI (19% of average local wages needed to own)
» Montgomery County, AL (21%)
» St. Louis City/County, MO (23%)
» Bibb County (Macon), GA (23%)
» Caddo Parish (Shreveport), LA (23%)
