Renting is more affordable than buying a home in all but two of the top 50 metro markets in January, according to a new data report from Realtor.com. One year ago, there were six markets where buying was less expensive than renting.
The average median asking rent in January reached $1,703, down by a scant 0.2% year-over-year. However, it also exceeds the average from pre-pandemic January 2020 by $257 (16.1%).
Pittsburgh and Detroit were the two markets with the lowest median listing prices among the top 50 metros, with Pittsburgh at $229,700 and Detroit at $239,950. Realtor.com noted the share of income used on rent was up year-over-year in Detroit and was nearly flat in Pittsburgh, thus making homebuying more economical than renting.
“For most Americans owning a home is still a big part of the American Dream, yet the lower monthly costs of renting in all but two of the 50 largest markets are a key consideration,” said Danielle Hale, chief economist at Realtor.com. “This relative cost advantage is one of the reasons we expect an increase in renter households and declines in the homeownership rate in 2025.”
Realtor.com also noted there were three metros – New York City, San Josem and Detroit – where the share of income used on both rent and buying a home are growing, making them both less renter- and less buyer-favoring. One metro – Kansas City, Kansas – was becoming more buyer-favoring due to a higher share of income spent on rents and a lower share of income on buying.
So the NAR, a supposedly proponent of home ownership, claims its cheaper to rent than own. And this claim made by our chief economist. WTF. Sure on a monthly cash outlay only, it may be cheaper.
But lets consider the tax benefit of the mortgage interest deduction. Depending on the persons tax rate that could be 20-30% of the monthly mortgage payment. Do the math.
Then lets consider market value appreciation, which averages 4.4%.
I am concerned the NAR statement sends a very narrow and false claim re: rent vs own.
No wonder we lost the Buyer Brokerage lawsuit……………..
I agree with you.
NAR through us under the bus.
NAR needs to quit holding us hostage!
realtor.com is nit NAR. remember they sold that off some years ago…. bad decisions are not new at NAR