Cost Differences Between Homeownership and Renting Narrows
The gap between the median monthly costs of homeownership and home renting narrowed in the fourth were separated by less than $300 in the fourth quarter of last year, according to new data from Realtor.com.
The monthly cost to purchase the median home was $1,600 during the fourth quarter while the median monthly rent in that period was $1,319. On average, the cost of buying the median home accounted for 30 percent of the national median income, while renting accounted for 25 percent.
Realtor.com also determined it was cheaper to buy than rent in 16 percent of the 593 counties with populations of 100,000 or more, up from 12 percent one year earlier. And it was cheaper to rent than buy in 84 percent of the nation’s largest counties, most notably New York City, San Francisco and Los Angeles.
“The move toward a more balanced equation is good news for home sellers during this spring home buying season as more people, especially the large cohort of millennials who turn 30 this year, begin to weigh the cost of buying versus renting,” said Realtor.com Senior Economist George Ratiu. “Due to a combination of factors, we saw the monthly cost to buy a home fall one percent year-over-year, while rents increased four percent during the same time frame.”