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Takeaways:
- It’s more affordable to buy than rent in two-thirds of the markets, but the balance is shifting.
- The 188 counties where it is more affordable to buy have a combined population of 74 million, just 54 percent of the 137 million combined population in all 285 counties analyzed.
- The buy-or-rent balance shifted to 58 percent in favor of buying in 2013 and 56 percent in favor of buying in 2014 before dropping to the 54 percent level in 2015.
Although it’s still more affordable to buy than it is to rent in two-thirds of U.S. housing markets, the balance is shifting away from buy and toward rent.
A recent RealtyTrac buy-or-rent analysis of 285 counties nationwide showed that in 2015 the monthly house payment on a three-bedroom single-family home or condo — assuming a 10 percent down payment and including mortgage, property taxes and insurance — was more affordable in 188 counties (66 percent) than the fair-market rent for a three-bedroom property.
But the buy-or-rent equation does not look so tilted toward buying based on population numbers. The 188 counties where it is more affordable to buy have a combined population of 74 million, just 54 percent of the 137 million combined population in all 285 counties analyzed.
When compared to the past three years, it’s apparent that the trajectory is moving toward renting as a more affordable option than buying based on population.
That’s certainly not to say that renting is becoming more affordable. Rents have just risen at a slower pace over the past three years than home prices, particularly in densely populated markets.
In 2012, the buy-or-rent balance was 65 percent in favor of buying based on population. It slowed to 58 percent in favor of buying in 2013, and 56 percent in favor of buying in 2014 before dropping to the 54 percent level in 2015.
The interactive visual below shows how this shift is occurring across the four years, and the 285 counties analyzed. Click on any county to see the buy-or-rent specifics for that county, and then move the slider for year to see how that buy-or-rent balance shifts over the four years.
Daren Blomquist is the vice president of RealtyTrac.
