The jump in home prices has prompted the cost of homeownership to outpace that of renting in more places across the country. The monthly costs of owning a home has increased by 14 percent over the past year—more than three times the 4 percent increase in monthly rental costs, according to a new analysis by realtor.com®.
Only 41 percent of the U.S. population now lives in a county where a median-income household can afford to buy a home at the median list price, according to the analysis.
“Even setting aside big upfront expenses like a down payment, rising month-by-month costs are likely keeping many people from purchasing,” says Danielle Hale, realtor.com®’s chief economist. “Today only 41 percent of people live in a county where the median income family can afford to buy a home at the median list price, and affordability declined significantly over the past year. Since homeownership has historically been an important source of household wealth creation, it could be problematic if this trend continues for too long. Still, even in places where renting is currently more affordable, rising home prices provide wealth building opportunity for home buyers.”
Homeowners’ costs have been continuing to rise. In July, the median monthly cost to buy a home was $1,647, compared to the average cost to rent a home at $1,267.