Median rents nationwide in June rose 14% from a year ago to a record $ 1,876 per month, according to a Realtor.com rental report. June reached a record high for 16 consecutive months, but retreated from a 17% year-on-year increase in rents in January, resulting in moderate growth for 5 consecutive months.
According to the report, median rent in June was $ 561 a month, or 30% lower than the usual monthly starter homeownership cost. The difference is significantly higher than the $ 78 / month paid by the lessor to the buyer in January, when mortgage rates were low.
But since then, average mortgage rates have skyrocketed by more than 2 percentage points, rising from 3.22 percent in January to 5.51 percent last week.
nevertheless Home prices also hit record highs in the first half of this year, according to a Realtor.com analysis, showing that mortgage rate hikes are the biggest factor in widening the affordable gap between rents and first-time purchases. ..
Realtor.com Chief Economist Daniel Hale said, “If mortgage rates didn’t rise, rents would rise faster than they originally were, closing the gap between rents and first-time purchases in the first half of this year. Let’s do it. “
Higher mortgage rates, according to the analysis, increased the cost of a typical starter home in June by about $ 416 a month compared to a year ago.
“Affordability of homes remains a challenge for many Americans, so it’s important to keep track of the impact of higher costs on your budget, whether it’s for rent or for the first time,” Hale said. Stated.
Purchase and rental
Of the 50 major cities in the United States, 38 were considered to be relatively affordable compared to buying a starter home from 24 January.
In some cities, the difference between the monthly cost of buying a home and the cost of renting is large, and we strongly support one or the other.
The top rent-loving market was dominated by the country’s largest technology hub, but first-time homeownerships were concentrated in the Midwest and South.
Austin, Texas has shown the strongest case of renting rather than buying. Monthly initial homeownership costs were $ 1,822 higher than the median rent in June, 98% higher. Another city that was far more attractive to rent than last month’s purchase was San Francisco. Seattle; New York; San Jose, CA; Portland, Oregon; Los Angeles; Boston; Houston; and Phoenix.
Pittsburgh was one of the cities where buying the first home was more advantageous than renting last month. Birmingham, Alabama; St. Louis; Cleveland; Baltimore; Louisville, Kentucky; Virginia Beach, Virginia; Indianapolis; Cincinnati; Kansas City, Missouri.
Joel Berner, Senior Economic Research Analyst at Realtor.com, said: “For first-time buyers who prioritize lower home prices, options may be found in these areas, but be sure to take into account the higher costs of other costs within your budget.”