RISMedia's Real Estate Magazine

OCT 2018

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/1032371

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Page 92 of 134

88 October 2018 RISMedia's REAL ESTATE According to an analysis recently released by realtor.com®, the cost of homeownership has increased more than three times the price of renting today—and, areas in grow- ing numbers are unaffordable. From July 2017 to July of this year, the ex- pense of homeownership (including insurance and taxes) mounted by 14 percent, to $1,647 (median, month- ly); to compare, the cost of renting rose 4 percent, to $1,267. Approxi- mately 40 percent of Americans are in a county that earns enough to pur- chase today. In addition, buying is cheaper in 35 percent of counties examined— a decrease from 44 percent in July 2017—and cheaper in only 7 per- cent of major markets, or those with over 100,000 residents. Roughly 290 counties are now in rent terri- tory, including freshly-minted Marion County, Ind. (Indianapolis); Bronx County, N.Y.; Richland County, S.C. (Columbia); Jackson County, Mo. (Kansas City); and Stark County, Ohio (Canton). "Even setting aside big upfront expenses like a down payment, ris- ing month-by-month costs are likely keeping many people from pur- chasing," says Danielle Hale, chief economist at realtor.com®. "Today, only 41 percent of people live in a county where the median-income family can afford to buy a home at the median list price, and afford- ability declined significantly over the past year." According to the analysis, buying is more expensive than renting in: New York County, N.Y. (Manhattan) Cost (Monthly) to Purchase: $9,840 Cost (Monthly) to Rent: $2,086 Kings County, N.Y. (Brooklyn) Cost (Monthly) to Purchase: $4,860 Cost (Monthly) to Rent: $2,086 Monterey County, Calif. (Salinas) Cost (Monthly) to Purchase: $4,816 Cost (Monthly) to Rent: $1,682 San Mateo County, Calif. (Menlo Park, Redwood City, San Mateo) Cost (Monthly) to Purchase: $8,405 Cost (Monthly) to Rent: $3,471 Santa Barbara County, Calif. (Santa Barbara, Santa Maria) Cost (Monthly) to Purchase: $4,878 Cost (Monthly) to Rent: $1,910 Buying is financially more prudent than renting, however, in: Clayton County, Ga. (College Park, Jonesboro) Cost (Monthly) to Purchase: $699 Cost (Monthly) to Rent: $1,236 Baltimore City, Md. (Baltimore, Towson) Cost (Monthly) to Purchase: $1,097 Cost (Monthly) to Rent: $1,475 Wayne County, Mich. (Detroit) Cost (Monthly) to Purchase: $695 Cost (Monthly) to Rent: $1,040 Cumberland County, N.C. (Fayetteville) Cost (Monthly) to Purchase: $864 Cost (Monthly) to Rent: $1,012 Madison County, Ill. (Edwardsville, Granite City; outside of St. Louis, Mo.) Cost (Monthly) to Purchase: $832 Cost (Monthly) to Rent: $1,019 "Since homeownership has his - torically been an important source of household wealth creation, it could be problematic if this trend contin- ues for too long," Hale says. "Still, even in places where renting is cur- rently more affordable, rising home prices provide wealth-building oppor- tunity for homebuyers." RE For more information, please visit www.realtor.com. Suzanne De Vita is RISMedia's online news editor. Email her your real estate news ideas at sdevita@rismedia.com. Cost of Homeownership Increases 3 Times the Price of Renting W ith affordability draining quickly, the gap is growing between the amount of buyers with a desire to purchase, and the amount of buyers who actually can. by Suzanne De Vita

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