Buying a home remains more affordable than renting one in more than half of housing markets, according to a recent RealtyTrac® report. This comes as home prices appreciate and rent outpaces wages, says RealtyTrac Vice President Daren Blomquist.
“Renters in 2016 will be caught between a bit of a rock and a hard place, with rents becoming less affordable as they rise faster than wages, but home prices rising even faster than rents," says Blomquist. "In markets where home prices are still relatively affordable, 2016 may be a good time for some renters to take the plunge into homeownership before rising prices and possibly rising interest rates make it increasingly tougher to afford to buy a home."
Across all 504 counties analyzed by RealtyTrac, average wage earners will need to spend 37 percent of their income to pay rent each month. In contrast, average wage earners across all 504 counties will need to spend 38 percent of their income to pay housing costs—but that includes mortgage, taxes, insurance and mortgage insurance. (This assumes a 3 percent down payment on a median-priced home.)
RealtyTrac estimates rent for a three-bedroom property will increase an average of 3.5 percent in the New Year.
Published with permission from RISMedia.