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According to a RealtyTrac report titled Residential Rental Property Analysis, 76 percent of the U.S. counties surveyed in the first quarter of 2015 found that it is more affordable to pay a monthly house payment for a median-priced home than a monthly fair market rent for a three-bedroom property.
There were certain parameters that had to be met in order to participate in the survey. Factors such as population size, rental data, and income were considered. Overall, information from 461 counties was used which had a total population of 217 million.
In regards to affordability, monthly house payments comprised 24 percent of estimated median income whereas rents accounted for 28 percent. Homeownership has classically been viewed as a more affordable option in the long-run with benefits that simply cannot be found with renting, such as accumulating equity and tax advantages.
However, with increasing personal debt and a fluctuating economy, the road to homeownership has been rocky. According to the U.S. Census Bureau, “The homeownership rate of 64.0 percent was 1.2 percentage points (+/-0.4) lower than the fourth quarter 2013 rate (65.2 percent) and 0.4 percentage points (+/-0.4) lower than the rate last quarter (64.4 percent).”
The decrease in homeownership is especially seen amongst the millennial generation. Crushing student debt and an uncertain job climate are the main factors in delayed homeownership.
RealtyTrac addressed this by focusing on the renter’s perspective in addition to the perspective of the homeowner. For example, it was revealed which counties are better to rent in as opposed to buying. The major California counties of San Francisco and Los Angeles, and New York’s Kings County were all more affordable for renters.
The report also showcased the top 10 counties for the highest rental return for residential properties. To view this in addition to the complete report, click here.