Rents have soared over the past year — but renting is still more affordable than buying at the entry-level in three-quarters of the country.
, which make the median payment on a "starter" home more costly than on a comparable rental apartment, according to its analysis. Home prices have not yet started to fall, which could balance out the equation.Whether to rent or to own is a timeless conundrum, filled with intangible caveats. Some people want to put down roots for the long haul. Others don't want to deal with the hassle of maintaining a house or apartment.
In a housing boom, when home prices are rising, renting is typically a better bet. But in the pandemic era, with more people looking for more space all at once, both options got more expensive. Rent increases do seem to be slowing down. Average rents grew for the fifth consecutive month, up 14.1% from last year — that's down from a peak in January of 19%, per Realtor.com.The analysis shows that some of the most expensive markets for homes are where it's most economical to rent.
In Austin, it costs 97.8% more to buy a starter home than to rent — a difference of $1,822. In San Francisco, it's 80% more. The analysis considered asking rents in June for studio, 1- and 2-bedroom apartments listed on Realtor.com and at large apartment complexes, compared to a monthly payment for a starter home based on June mortgage rates and list prices.
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