Realtor.com Report: Buying Is Often More Affordable than Renting
SANTA CLARA, Calif. — Realtor.com just released its January Rental Report showing that, in January, the monthly cost of buying a starter home was more affordable than renting a similar-sized unit in 26 of the 50 largest U.S. metros, led by secondary cities like Birmingham, Ala., Cleveland and Pittsburgh.
The digital real estate company said that potential monthly starter home savings are largely attributed to skyrocketing rents. In January, the U.S. median rental price increased by double-digits for the eighth straight month, up 19.8% year-over-year. Compared to growth in the monthly cost of buying a home with up to two-bedrooms (+11.0% year-over-year), all rental unit sizes posted higher yearly gains in January: Studios, up 21.0% ($256); 1-bedrooms, up 19.2% ($266); and 2-bedrooms, up 19.2% ($323).
“U.S. rental markets are more than making up for lost time, with January data showing national rents continued to surge by double-digits over last year – and at a faster pace than for-sale home prices. So much faster, in fact, that even as monthly starter home costs increased in many of the markets that favored buying, rents for a similar-sized unit were 20% higher,” said Realtor.com Chief Economist Danielle Hale in a press release. “While both rental and home-buying costs are rising, a number of factors could tip the affordability scale in favor of first-time buying for many Americans this year. Rents are forecasted to outpace listing price growth in 2022 and are already accelerating across all unit sizes. Additionally, survey data shows the majority of landlords plan to raise rental asking prices this year. But the buy-versus-rent decision ultimately depends on personal circumstances like where you live, your financial situation and how long you want to live in your next home. As mortgage rates continue climbing, those looking to buy their first home in 2022 are more likely to find lower costs now than later in the year, but home selection is expected to improve as we move toward spring, when many homeowners target listing their home for sale.”
January 2022 Rental Metrics – National
|Unit Size||Median Rent||Change over Jan. 2021||Change over Jan. 2020|
Click here to see the complete report.