PR Newswire
SANTA CLARA, Calif., March 2, 2021
SANTA CLARA, Calif., March 2, 2021 /PRNewswire/ -- Despite double-digit increases in home prices and a record low number of homes for sale, buying is becoming more affordable in a growing number of the nation's largest cities, according to a new buy versus rent analysis released today by realtor.com®.
The analysis, which compared the monthly cost of buying a median priced home to the median price of renting a two- to four-bedroom unit in each of the top 50 markets in January 2021, found buying cost the same or was cheaper in 15 of the nation's 50 largest metros, up from 13 a year ago. Moreover, nine other markets were within 5% of flipping in favor of buying -- Atlanta; Orlando, Fla.; Birmingham, Ala.; Phoenix; Buffalo, N.Y.; Memphis, Tenn.; Washington, D.C.; Las Vegas and Milwaukee.
"There isn't a one-size-fits-all answer to the question of whether it makes more sense to buy than rent. However, this is encouraging news for the millions of millennials who are approaching peak homebuying age and may be considering shopping for a home this spring," said realtor.com® Chief Economist Danielle Hale. "With interest rates expected to rise over the coming months, buyers may need to act sooner rather than later to take advantage of today's affordability or be prepared to adjust their target purchase price."
Thanks to historically low interest rates, the monthly cost to purchase the median price home in the U.S. increased a mere 0.2% year-over-year to $1,988, despite the double-digit growth in home prices. The cost to rent was up 2.4% to $1,727.
On average, buying the median priced home accounted for 32% of a metro's median income, just slightly above the upper limit of the budgeting rule of thumb of spending 30% of gross income on housing costs. The cost to rent accounted for 27%.
Below average listing prices made it more affordable to buy
In the top 10 metros that favored buying over renting -- Cleveland, Chicago, Pittsburgh, Riverside, Calif., Miami, New Orleans, Baltimore, Tampa, Fla., Hartford, Conn. and Detroit -- the median listing price of a home averaged 7.7% lower than January's national median listing price of $346,000, while rents were 0.7% greater than the top-50 average. The monthly cost of buying in these metros dropped 0.2% compared to last year, while rents have risen 4.9% during that same period. The end result is that those who buy in these metros are able to save an average of 11% of their monthly costs compared to renters.
Markets that Favor Buying
Rank | Metro | Median Listing | Buy (monthly) | Rent | Buy | Rent Percent of Income |
1 | Cleveland-Elyria, Ohio | $198,000 | $967 | $1,195 | 19% | 23% |
2 | Chicago-Naperville-Elgin, Ill.-Ind.-Wis. | $338,000 | $1,691 | $1,975 | 26% | 31% |
3 | Pittsburgh, Pa. | $245,000 | $1,250 | $1,445 | 23% | 27% |
4 | Riverside-San Bernardino-Ontario, Calif. | $485,000 | $2,224 | $2,536 | 37% | 43% |
5 | Miami-Fort Lauderdale-West Palm Beach, | $400,000 | $2,092 | $2,350 | 40% | 45% |
6 | New Orleans-Metairie, La. | $320,000 | $1,401 | $1,545 | 31% | 35% |
7 | Baltimore-Columbia-Towson, Md. | $325,000 | $1,561 | $1,693 | 21% | 23% |
8 | Tampa-St. Petersburg-Clearwater, Fla. | $302,000 | $1,494 | $1,605 | 30% | 32% |
9 | Hartford-West Hartford-East Hartford, | $303,000 | $1,589 | $1,700 | 23% | 25% |
10 | Detroit-Warren-Dearborn, Mich. | $265,000 | $1,277 | $1,350 | 23% | 25% |
11 | St. Louis, Mo.-Ill. | $250,000 | $1,167 | $1,209 | 20% | 21% |
12 | Philadelphia-Camden-Wilmington, Pa.- | $328,000 | $1,752 | $1,800 | 28% | 29% Werbung Mehr Nachrichten zur News Corp B Aktie kostenlos abonnieren
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