Paying rent cheaper than mortgage in 76 percent of 50 largest metropolitans in United States

Paying rent cheaper than mortgage in US
Paying rent cheaper than mortgage in US
Khushbu Kumari

Realtor's June report reveals that skyrocketing home prices and high interest rates have meant that renting a home is more affordable than paying a mortgage in three-quarters of the nation's 50 largest metropolitan areas.

The high mortgage rates in the country are pushing, for the first time, that in 76% of the largest metropolitan areas in the United States it is more affordable to rent than to buy a home. Should you buy a home now?

Data from real estate broker Realtor.com 's June report says the gap between starting monthly property costs and rents widened 25.5 percentage points from January to June.

The galloping inflation in the country, which reached 9.1% in June, the highest increase in 40 years, has impacted the real estate sector with exorbitant prices.

Danielle Halle, Chief Economist at Realtor.com says, “With rents and home prices hitting record highs in June, the rising cost of financing a home has boosted rental affordability relative to typical up-front costs. home ownership”.

In June, the median rental price in the country hit a new high of $1,876 , an increase of 14.1% from the previous year, while overall rents remained 27.6% higher than in 2020 and unit sizes they obtained annual profits of 15.1%, for the studies; 13.8%, for one-bedroom units; and 13.6%, for those with two bedrooms.

In contrast, monthly starting costs of home ownership were on average 29.9% higher than rents in June , up from 4.4% in January. In 2021, the monthly purchase cost was $1,815, which is $171 more than rents nationwide.

Added to this, high mortgage rates have added about $416 to the typical starting costs of a home in June.

These are the five metropolitan areas where it is best to rent:

1. Austin, Texas

In Austin , there is a 97.8% difference between the median rental price and the median monthly mortgage payment , equivalent to $1,822.

2. San Francisco, Calif.

In this area, the difference between the average rental price and the average monthly mortgage payment is 79.9%, equivalent to $2,535 dollars.

3. Seattle, Wash.

In Seattle , there is a 78.3% difference between the average rental price and the average monthly mortgage payment, which corresponds to $1,801 dollars.

4.New York, NY

In New York there is a difference of 70% between the average rental price and the average monthly mortgage payment, equivalent to $2,092 dollars.

5. San Jose, Calif.

In this area, the difference between the average rental price and the average monthly mortgage payment is 65.4% , equivalent to $2,175 dollars.

The five metropolitan areas where it is best to buy

1. Pittsburgh, Pennsylvania

In Pittsburgh the difference is negative: there is -33% difference in favor of the purchase . There is a difference of $522 dollars between both average prices.

2. Birmingham, Alabama

In this area there is -29.5% difference in favor of buying . That is, there is a difference of $377 dollars between the average prices.

3. St.Louis, Missouri

The difference in favor of the purchase is -20.7% in this area of ​​Missouri. There is a difference of $284 dollars between both average prices.

4. Cleveland, Ohio

In Cleveland there is -13.8% difference in favor of the purchase. There is a difference of $198 dollars between both average prices.

5. Baltimore, MD

In this area there is -9% difference in favor of the purchase. That is, there is a difference of $164 dollars between the average prices.

Given the vertiginous increase in prices, buyers still have the opportunity to acquire homes.

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