ATTOM Data Solutions released its 2017 Rental Affordability Report, which shows that buying a home is more affordable than renting in 66 percent of U.S. housing markets analyzed for the report.
The analysis incorporated recently released fair market rent data for 2017 from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics along with public record sales deed data from RealtyTrac in 540 counties with at least 900 home sales in 2016.
“While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017,” ATTOM Data Solutions Senior Vice President Daren Blomquist said. “In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year. Additionally, renting may end up being the lesser of two housing affordability evils in a growing number of high-priced markets.”
The report found making monthly house payments on a median-priced home — including mortgage, property taxes and insurance — is more affordable than the fair market rent on a three-bedroom property in 354 of the 500 counties analyzed in the report (66 percent).
Among the nation’s most populous counties, those where it is more affordable to buy than to rent are Cook County (Chicago), Ill., Maricopa County (Phoenix), Ariz., Miami-Dade County, Fla.; San Bernardino County, Calif., in inland Southern California; Clark County (Las Vegas), Nev.; Tarrant County, Texas in the Dallas metro area; Wayne County (Detroit), Mich.; Broward County, Fla. in the Miami metro area; Bexar County (San Antonio), Texas and Philadelphia County, Pa.
Markets more affordable to rent than to buy
Counter to the overall trend, renting is more affordable than buying a home in 186 of the 540 counties analyzed for the report (34 percent), including Los Angeles County, Calif.; Harris County (Houston), Texas; San Diego County, Calif.; Orange County, Calif.; Kings County (Brooklyn), N.Y.; Dallas County, Texas; Queens County, N.Y.; Riverside County, Calif. in the inland area of Southern California; King County (Seattle), Washington; and Santa Clara County (San Jose), Calif.
Least affordable rental markets
On average across the 540 counties analyzed, monthly fair market rent on a three-bedroom property in 2017 will require 38.6 percent of average wages, while a monthly house payment on a median-priced home (including mortgage, property taxes and insurance) requires 36.6 percent of average wages across the 540 counties on average.
The least affordable rental markets requiring the highest percentage of average wages to pay fair market rent in 2017 are Marin County, Calif. in the San Francisco metro area (77.3 percent); Spotsylvania County, Va. in the Washington, D.C. metro area (73.7 percent); Monroe County (Key West), Fla. (72.2 percent); Honolulu County, Hawaii (70.7 percent); and Maui County, Hawaii (70.6 percent).
There were a total of 55 counties where the average fair market rent on a three-bedroom property in 2017 will require more than 50 percent of average wages, including Kings, Queens, Suffolk, Bronx and Nassau counties in the New York metro area; Contra Costa and Alameda counties in the San Francisco metro area; and Orange and San Diego counties in Southern California.