The average cost of renting a home in the U.S. has reached record highs for 16 consecutive months, with a typical June apartment now at $ 1,876, according to Realtor.com. So, should this encourage tenants to take the step to buy their own blog?
Not necessarily. On average, first-time home buyers could expect their monthly payments to exceed $ 2,400, according to the real estate listing company. Renting is cheaper than buying in three-quarters of the country’s 50 largest metropolitan areas, according to Realtor.com.
The culprit? Increase in mortgage rateswhich “increasingly tilt the scale of home accessibility in favor of rent rather than first-time purchase,” according to the research company.
The average annual interest rate on a 30-year fixed-rate mortgage has reached 5.51% this week, more than 2 percentage points higher than at the beginning of the year. That jump means a $ 300,000 home now costs an additional $ 325 a month compared to January.
“Our analysis shows that if it weren’t for the higher mortgage rates, the gap between renting and buying for the first time would have narrowed during the first half of this year, as rents grew faster than home prices, ”Danielle Hale, chief economist at Realtor.com. , he said in a statement.
Large coastal cities with more well-paid jobs are the most expensive places to have a home, compared to rent. San Francisco, San Jose, New York and Los Angeles have the highest price premiums for owning a home, a trend that has continued over the past four years, according to Realtor.com.
In the San Francisco-Oakland metropolitan area, a first-time home buyer would pay an average of $ 2,500 more per month than he would rent, according to the analysis. The monthly premium to own is $ 2,175 in San Jose, $ 2,092 in New York, and $ 1,846 in Los Angeles, where a year ago property and rental costs were roughly the same.
The Austin, Texas metropolitan area was a little friendlier with landlords as recently as last year, when new homeowners saved nearly $ 400 a month compared to rent. But that equation was turned upside down this year, as the property now costs almost twice as much as rent, according to Realtor.com.
Other cities where property has only become more expensive than rent include Boston, where it costs an average of $ 1,700 more per month, and Denver, where the typical mortgage costs $ 1,025 more than rent.
Realtor.com noted that some cities, especially the smaller ones in the Midwest and South, are still favorable to buying a home. At the top of the list is Pittsburgh, where an initial home costs $ 500 less per month than a comparable rent, followed by Birmingham, Alabama ($ 377), St. Louis. Louis ($ 284) and Cleveland ($ 200).
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- Mortgage rates
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