Many renters would be better off buying a home than continuing to pay steep rental costs, finds a new study.
The monthly payment on a median priced home is more affordable than the monthly fair market rent on a three-bedroom property in 76 percent of the U.S. counties, according to RealtyTrac’s Residential Rental Property Analysis, which encompassed 461 counties nationwide with populations of at least 100,000.
Overall Researchers found that fair market rents represented 28 percent of the estimated median household income, while monthly house payments on a median-priced home – which included a 10 percent down payment and property taxes, home insurance, and mortgage insurance – represented 24 percent of the estimated median income.
"From a pure affordability standpoint, renters who have saved enough to make a 10 percent down payment are better off buying in the majority of markets across the country," says Daren Blomquist, vice president at RealtyTrac. "But factors other than affordability are keeping many renters from becoming buyers, a reality that means real estate investors buying residential properties as rentals still have the opportunity to make strong returns in many markets."
Of the 461 counties analyzed, 351 had house payments on a median-priced home in the first quarter of this year that was lower than fair market rents on a three-bedroom home.
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