Renting a home is becoming more affordable than buying one, according to a new report by Realtor.com. It is cheaper to buy a home than to rent one in only 35 percent of U.S. counties.
The cost of buying a home grew by 14 percent year-over-year in July 2018, while the cost of renting increased by four percent. The home listing website's chief economist Danielle Hale says, “Since homeownership has historically been an important source of household wealth creation, it could be problematic if this trend continues for too long." MarketWatch reports that in markets favoring renting have homeownership rates between 23 and 59 percent, five percent lower than the national rate.
The gap is even greater in counties where the population exceeds 100,000 people — buying is more affordable in only 7 percent of those counties. Over the past year, 20 counties with 100,000 residents or more shifted from being more affordable for home buyers to being cheaper for renters. Three-quarters of these counties were located in the South and the Midwest, Realtor.com reported.
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