Chart of the Day: Cheaper to Buy or Rent Your Home?

A new report says that owning a median-priced home is more affordable than the average rent on a three-bedroom property in 58% of America. However, there’s is a big city/suburban divide. Renting makes more sense in big metropolitan areas, while homeownership wins out in rural areas and suburbs, where property prices are lower.

According to Mortgage Professional America, a trade publication, renting was marginally less expensive than buying in eight of the ten most populous states at midyear 2021. See this phenomenon in a map of the US that shows where the areas are cheaper or more expensive to rent vs. buying a home by region. Learn more here and get a more detailed interactive map.

Cheaper to Buy or Rent US Map 2021

The Covid “pandemic” has changed a lot of things, and it has been global. For example, let’s look at the cost of rent vs. buying a house in the UK. For the last five years, buying a home has been cheaper than renting on a monthly basis.

But the pandemic reversed this trend. Despite rents in the UK rising 7.1% over the last 12 months, strong house price growth coupled with increases in higher loan-to-value (LTV) mortgage rates have added to the cost of buying and owning a home. As a result, a typical UK first-time buyer will now find it cheaper to rent than buy on a monthly basis. See this trend in the chart below and learn more here.renting-v-buying UK 2021

The take-a-way of these charts is that renting today is cheaper than buying a home relative to the high-cost real estate urban areas than previously. This may mean that real estate prices may stall at current levels for the short term. However, this may be transitory, as inflation in the long run still may make home ownership the best bet.

See more #chartoftheday posts.

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 RWR original article syndication source.

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Written by Tom Williams

Born down on the farm in America's Midwest, my early life was spent climbing the ladder via a long career in information technology. Starting as a technician, and after earning a degree going to night school, I eventually found a place working at ATT Bell Laboratories as a software engineer.

Later moving into management and then a long stint in a major management consulting firm working with major banking, telecommunications, and retail companies. Working in various states in America, I also spent considerable time living and working in several European countries - currently expat in France. As a side career, I was heavily involved in real estate development and an avid futures trader. This experience can give one a unique view of the world.

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