Home News Rents just hit a new high, but renting is still cheaper than owning in these cities

Rents just hit a new high, but renting is still cheaper than owning in these cities

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Rents have reached new highs, according to a new report, but rents are still almost affordable than owning a home in most big cities.

According to Realtor.com’s June rental report, median rent across the country rose for the 16th straight month, reaching $ 1,876 in June. It’s expensive, but it’s still 29.9% (or $ 561) lower than the monthly starter homeownership cost. This is because rising mortgage rates are pushing up borrowing costs.

According to Realtor.com, the gap between monthly payments for starter homes and renting a home widened by 25.5%, or $ 483, from January to June. In more than three-quarters of the top 50 cities in the United States, it was cheaper to rent than to own.

Mortgage rates are approaching 6%, adding hundreds of dollars to homebuyers’ monthly bills. According to Realtor.com, high prices are the “biggest factor” in the gap between buying and rent, adding $ 416 per month.

Median studio rent increased 15.1% from June 2021 to $ 1,544. One bedroom was $ 1,738. 2 bedrooms $ 2,104.

“According to our analysis, the gap between rent and first-time purchases would have narrowed in the first half of this year if mortgage rates weren’t high,” Realtor.com chief economist Daniel Hale said in a statement. Said. It rose more rapidly than the starter home price. “

S & P Global Ratings recently reported that from the five years before the pandemic to the fourth quarter of this year, median income was 11.3 years for first-time homebuyers to save 10% down payments. It is estimated that it will take.

The company 60% of US households It will be priced from Starter Home by the end of 2025.

“The American dream may be out of reach anymore,” concludes the report’s title.

Looking for a move? According to Realtor.com, the top five cities that make more sense to rent than to own on a cost basis are Austin, San Francisco, Seattle, New York City, and San Jose, California.

The top five cities that make more sense to buy than to rent are Pittsburgh, Birmingham, St. Louis, Cleveland and Baltimore.

Write to MarketWatch Reporter Aarthi Swaminathan at [email protected]

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