Renting Is Cheaper Than Owning in Nearly 90% of Local Markets Article originally posted on Multifamily Executive on January 25, 2024 Median three-bedroom rents in the United States are more affordable than owning a similarly sized home in nearly 90% of local markets around the nation, according to ATTOM’s 2024 Rental Affordability Report. While both renting and owning a three-bedroom home continues to pose significant financial burdens taking up more than one-third of wages for average workers, median rental rates still require a smaller portion of average wages than major homeownership expenses on three-bedroom properties in 296 (88%) of the 338 U.S. counties with enough data to analyze. A trend established before 2023, the gap in renting versus owning remains even as rents have risen faster than home prices over the past year, according to ATTOM. “Finding an affordable home remains a daunting prospect around the country for average workers, regardless of whether they want to buy or rent. Continuously increasing home prices contribute to the escalation of rental costs, making both buying and renting properties a challenging endeavor across most of the United States,” says Rob Barber, CEO at ATTOM. “But the latest data shows that even as rents are growing faster, they remain more affordable than owning.” Median rents for three-bedroom homes have increased more over the past year (or declined less) than median prices for single-family homes in 210 (62%) of the 338 counties analyzed in this report. Counties were included in the report if they had a population of 100,000 or more, at least 100 sales from January through November 2023, and sufficient data showing changes in three-bedroom rents from 2023 to 2024. In 2023, changes in three-bedroom rents have commonly ranged from 3% decreases to 15% increases, while changes in median sale prices for single-family homes typically ranged from 3% losses to 7% increases. In almost 75% of markets with populations of at least 1 million, the share of average local wages consumed by renting is at least 10 percentage points lower than the portion required for typical major homeownership expenses, assuming a 20% down payment. Among 45 counties with a population of at least 1 million included in the report, the largest gaps are in: Honolulu: 67% for renting versus 134% for owning Kings County (Brooklyn), New York: 72% for renting versus 136% for owning Alameda County (Oakland), California: 51% for renting versus 108% for owning Santa Clara County (San Jose), California: 29% for renting versus 83% for owning Orange County, California (outside Los Angeles): 88% for renting versus 136% for owning In 2024, the only two counties with a population of more than 1 million where it is more affordable to buy than rent are Riverside County, California (101% for renting versus 91% owning) and Wayne County (Detroit), Michigan (22% for renting versus 19% for owning). Of the 388 counties analyzed for the report, the median three-bedroom rent requires more than one-third of the average local wage in 274 counties. Of the 64 markets where rents require less than one-third of average local wages, 59 are in the Midwest and South. These markets include Jefferson County (Birmingham), Alabama; Wayne County (Detroit), Michigan; Ingham County (Lansing), Michigan, all at 22% of local wages; and Genesee County (Flint), Michigan, and Caddo Parish (Shreveport), Louisiana, both at 23% of local wages. The most affordable markets for owning are Wayne County (Detroit), Michigan (19% of average local wages needed to own); Montgomery County, Alabama (21%); St. Louis City/County, Missouri (23%); Bibb County (Macon), Georgia (23%); and Caddo Parish (Shreveport), Louisiana (23%).