July 2018 Rent vs Buy

The Question Troubling Home buyers, The cost of buying a home has 

risen by 14 percent over the past one year. That is more than three times the rate of monthly rental costs, according to research published by Realtor.com on Thursday.

The research indicated that as home prices rose across the U.S.renting was becoming increasingly popular.

The analysis also found that the number of places where it was cheaper to buy had significantly declined in the past one year.

“Even setting aside big upfront expenses like a down payment, rising month-by-month costs are likely keeping many people from purchasing,” said Danielle Hale, chief economist at Realtor.com.

The analysis found that only 41 percent of the nation's population lived in a county where a median-income family could afford to buy a home. While the cost to buy a home rose by 14 percent year over year, cost to rent increased only 4 percent. It was cheaper to buy a home compared to renting in 35 percent of the counties in July, this compared to 44 percent during the same time last year.

“Today homes at the median list price, and affordability declined significantly over the past year. Since home ownership has historically been an important source of household wealth creation, it could be problematic if this trend continues for too long.

Still, even in places where renting is currently more affordable, rising home prices provide a wealth-building opportunity for home buyers,” Hale said.

Analysis Highlights

• Only 41 percent of the nation’s population lives in a county where a median-income family can afford to buy a home.      
• Nationally, the cost to buy rose by 14 percent from July 2017 to July 2018, while the cost to rent increased by 4 percent.
• In July, buying a home was cheaper than renting in 35 percent of counties, compared to 44 percent of counties last year.
• The top five counties where purchasing a home was more affordable than renting last month were: Clayton County, Ga.; Baltimore City, Md.; Wayne County, Mich.; Cumberland County, N.C.; and Madison County, Ill., with the share of income to buy being 4 percent to 14 percent lower than the share of income to rent.
• Renting remains much less expensive than buying in Manhattan, N.Y.; Brooklyn, N.Y.; Monterey County, Calif.; San Mateo County, Calif.; and Santa Barbara County, Calif.
• In the last year, 20 counties with 100,000+ residents flipped from being cheaper to buy to being cheaper to rent, three quarters of which were in the South and Midwest.

In contrast renting remained less expensive than buying in Manhattan and Brooklyn in New York and in Monterey County, San Mateo County, and Santa Barbara County in California. 

Sell or Buy doesn’t have to be a huge undertaking, but it’s one where details really matter. When you’re working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to Sell or Buy your home.

 #RealEstateForSale #Homeownership #UtahRealEstate

Read the full analysis here.