The Urban Institute says it's more affordable to own a home with a mortgage than it is to rent in the U.S. In a new study, the findings suggest it is more affordable to rent than to own in 16 of the largest metropolitan areas.
San Francisco tops the list of metros where it's more affordable to rent. The city's rent gap is at 43 percent, meaning that a median-income household would spend 80 percent of their income paying the monthly mortgage on a median-price home with a 3.5 percent down payment. CNBC compares that to a household spending 37 percent of its income on the median rent for a 3-bedroom house. The homebuyer would be paying an additional 43 percent of its income, and the renter would still be considered cost-burdened.
"But even though it is cheaper to rent in San Francisco that does not mean it is still affordable for many people," said Sarah Strochak, research assistant for the Housing Finance Policy Center. It just means that a greater portion of your income would be going to housing costs when owning a home than when renting.
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