Is Home Ownership More Affordable Than Renting? It Depends.


A report released this month suggests that despite rising home prices it is more affordable to own a median-priced house than to rent a three-bedroom property in a majority of the United States.

ATTOM’s 2022 Rental Affordability Report used fair-market rent data from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics, and sales deed data in 1,154 counties to find that home ownership will be more affordable in a majority of the country again in 2022.

Todd Teta, Chief Product Officer at ATTOM, said home ownership still remains the more affordable option for average workers because it takes up a smaller portion of their pay when the math is done.

“The trend is slowly shifting toward renters, which could be a major force in easing price increases in 2022. Prices can only go up by so much more before renting becomes financially easier. For now, though, rising wages and interest rates around 3 percent are enough to offset recent price runups and keep ownership on the plus side of the affordability ledger compared to renting,” Teta said in a statement.

Owning is more affordable in less-populated counties, while renting is still cheaper in more densely populated areas, according to the report.

In counties with a population of one million or more, it is more affordable to rent than to buy in 69 percent of them.

Los Angeles County, California; Cook County, Illinois; Maricopa County, Arizona; San Diego County, California; and Orange County, California, are highlighted in the report.

Other counties with a population of more than one million where it is more affordable to rent than to buy include locations in the Dallas, Miami, New York City, San Francisco, Washington, D.C., and Riverside, CA, metropolitan areas, according to the report.

There were 91 counties included in the report which had populations of 500,000 to 999,999 people. Renting was found to be more affordable particularly in St. Louis County, Missouri; Honolulu County, Hawaii; Fresno County, California; Collin County, Texas; and Westchester County in New York.

Collin County is outside Dallas, while Westchester County is outside of New York City.

In the counties with populations of less than 500,000, owning was more advantageous in 61% of them.

Lake County, Indiana; Seminole County, Florida; Knox County, Tennessee; East Baton Rouge Parish, Louisiana; and Jefferson Parish, Louisiana were the areas where this impact was felt most.

So where are the most affordable cities for renters if they don’t want to move to the suburbs and get into the housing market?

A RentHop Singles Index published in November shows that in 2021 the least affordable cities were Miami, Florida; New York City; New Orleans, Louisiana; Raleigh, North Carolina; and Boston, Massachusetts.

A median studio apartment costs $2,450 in New York City with Boston not far behind at $2,250, according to the index.

The most affordable cities were Wichita, Kansas; Columbus, Ohio; Albuquerque, New Mexico; Oklahoma City; and Tulsa, Oklahoma.

In Witchita, a median studio apartment is $500, according to the index.

Millennials are expected to keep the market hot when it comes to home buying, so this may be good news for sellers in suburban and rural areas of the country.

During a recent webinar designed to address what mortgage professionals should expect in 2022 and beyond Jeremy Sicklick, CEO and Co-Founder of HouseCanary, Inc., predicted millennials would generate demand in the housing market over the next ten years.

“Effectively, demand will continue to exceed supply,” Sicklick said. “As we look forward, really over the decade, I mean, we are very bullish on housing, and that comes back to just the sheer number of Millennials and household formation that’s going to occur. There’s just a massive amount of demand out there.”

It is even being reported that millennials are buying homes with friends.

Email story ideas to Editor Kimberley Haas: [email protected]