Renting Officially Twice as Expensive as Buying

As rent continues to steeply build in the US, Zillow confirms what we've been anticipating all along: renting a home is now officially twice as expensive as buying a home here in the US.

Renters can expect to spend about 30% of their income on rent, while homebuyers can expect to pay only 15% of their income on monthly mortgage payments.

As you may expect, the ratio was not always this way. In fact, between 1985 and 2000, rent was typically more affordable in major cities than buying. Now, those who are able to put together a down payment to purchase a property are actually in the better situation.

Even is metros like San Francisco, Los Angeles, Seattle, and Boston is it now more affordable to buy a home than rent one, even though renting used to be a more viable option before the real estate market crash.

Of course, younger buyers that can only afford to make smaller down payments will have to spend more than other buyers on mortgage payments - but not much more than 17% of their income, which is still substantially more affordable than renting on a monthly basis. Zillow Chief Economist Dr. Stan Humphries elaborates:

"Despite rising home values, homeownership remains very accessible for buyers that can scrape together a down payment — even a relatively modest one — find a home to buy and secure financing."

Unsure what this means for you? Wondering what exists in the market for you? Don't hesitate to send us an email or give us a call! We'll be happy to help.

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