flexiblefullpage - default
Currently Reading

Home Prices Outpace Rents—But the Affordability Gap Is Shrinking

Market Data + Trends

Home Prices Outpace Rents—But the Affordability Gap Is Shrinking

To rent or not to rent? Surging prices could complicate housing decisions in the coming year

January 7, 2022
buy or rent pros/cons
Image: Stock.adobe.com

Median-priced, single-family homes are outpacing rental rates and shrinking the affordability gap between homeowner and tenant, says CNBC. States across over three quarters of the nation are reporting less affordability for single-family homes, the highest total in 13 years and a 39% change from 2020.

Single-family rents also increased 10.9% year-over-year in October, the sixth consecutive high during a typically slow season for the housing and rental markets. Though homeownership offers more affordability with historically low mortgage rates, renting could become more cost-effective as rates steadily increase in 2022.

Owning the median-priced home is more affordable than the average rent on a three-bedroom home in 58% of the nation, according to ATTOM, which factored in all the expenses of owning, including the monthly mortgage payment, property taxes and homeowners insurance.

Much of this affordability is due to the historically low mortgage rates of the past few years. Rates are now beginning to rise, however, and are up more than half a percentage point from the year-earlier period, according to Mortgage News Daily.

“The trend is slowly shifting toward renters, which could be a major force in easing price increases in 2022,” said Todd Teta, chief product officer with ATTOM. “Prices can only go up by so much more before renting becomes financially easier.”

Read more

Related Stories

Community Development

Microunit Communities Offer Starting Point for Gen-Z Renters

The rise of microunit communities gives Generation-Z renters a chance to find affordable housing in high-cost metro markets

Build to Rent

Is the Built-For-Rent Sector Prepared to Weather a Possible Recession?

BFR investors are fretting over a few worrisome trends as the market is pushed to the brink of a recession

Market Data + Trends

After Years of Record-Breaking Gains, the Rental Market May Finally Be Cooling, Experts Say

June rental prices set a record for the 16th consecutive month, but an era of nonstop rent hikes could be coming to an end 

boombox1 -
native1 - default

More in Category

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.