buying is becoming more affordable than renting in many cities

[Tariq Hakeem]

Realtor.com says despite double-digit increases in home prices and a record low number of homes for sale, buying is becoming more affordable in a growing number of the nation's largest cities compared to renting. The monthly buying cost of buying is the same or was cheaper in 15 of the nation's 50 largest metros, up from 13 a year ago. Nine other markets were within 5% of flipping in favor of buying from renting. Low interest rates have made the monthly cost to purchase the median price home in the US rise 0.2% year-over-year to $1,988, despite the double-digit growth in home prices. The cost to rent was up 2.4% to $1,727. In the top 10 metros that favored buying over renting, the median listing price of a home averaged 7.7% lower than January's national median listing price of $346,000, while rents were 0.7% greater than the top-50 average.

[Jay Hinrichs]

its been that way for decades in many parts of the mid west deep south rust belt areas.. ..  

[Carlos Ptriawan]

I have the chart that can show this in data visualization. Basically, since the 2021 median payment decreases compare to 2018, the house is becoming more affordable although house price is more expensive. Because almost everybody is buying with financing except some guy in Ohio that want cash only (or asking CA folks to move to OH hahaha)

[Ryan Mainwaring]

@Jay Hinrichs Great point and couldn't agree more.  

[Matt M.]

@Tariq Hakeem

Absolutely. One of my rentals- he pays $1450 rent. If he were to buy it from me right now at market value, putting 3.5% down, his mortgage would be $1015.

[Jay Hinrichs]

@Ryan Mainwaring@Matt M.@Carlos Ptriawan

Keep in mind any property basically that cash flows with minimum down for an investor will be cheaper for someone to buy. 

especially in states were prop tax's are far lower for owner occ.. ( which is many)  owner occ loans have lower interest rates than investor loans and that spread is only going to get wider now with the new fannie rules.. 

I am sure there are myriad of reasons why renters don't buy.. I know in my A class rentals when I do have a tenant leave its because they bought a home generally speaking..  

As we all know a vast majority of renters have zero savings so even mustering 3.5 Down and another 5k for closing costs simply keeps them out of the game.. although also we know there are still down payment assistance programs.. NACA is in many markets its true no down.. Also the AG loan no down program but that's for cities of I think less than 30k or something like that..

I think many renters in a lot of markets that have not had any real historic appreciation steady eddy over the years buyers see primary houses as a liability if they rent it they don't have to maintain it.

[Jacoby Atako]

@Tariq Hakeem

I've definitely found this to be true with good investment properties. But there's a lot of reasons people rent: bad credit, not enough savings, fear of commitment, fear of owning a home, unstable job, relationship instability...etc.

There will always be people who need to rent.