Report: Renting still less affordable than buying
Buying a home will still be more affordable than renting in most markets across the nation, according to a 2015 analysis from housing data site RealtyTrac.
Using federal data on three-bedroom rental properties in hundreds of U.S. counties, the RealtyTrac report found rental prices would use up an average of 27 percent of median household income. Buying a median-priced home would require a slightly lower 25 percent, based on November prices.
"Buying is still more affordable than renting in many markets, even though we've seen home prices go up fairly dramatically," said Daren Blomquist, vice president of RealtyTrac. "Home prices are up 6 percent year-over-year, whereas rents are up 2 percent."
The report declared it would be cheaper to buy than rent in several New Jersey counties, including Burlington, Mercer, Middlesex and Sussex.
Renting a property, though, ended up being the cheaper route in a number of markets that shared certain attributes - more jobs, more amenities and a surging millennial population.
In Hudson County, for example, 33 percent of income would be needed to cover rental payments. But if someone were to buy a home, 47 percent of income would be required.
"It's actually cheaper to rent in many of those counties where the millennials are moving, but that doesn't mean rents are low," Blomquist said.
Blomquist suggested that first-time homebuyers are "stuck between a rock and hard place" today; in many of the markets with the most options, buyers are dealing with hard-to-afford rents and even harder-to-afford home prices.