A new RealtyTrac study shows that the monthly mortgage on a median-priced home is more affordable than the monthly fair-market rent on a three-bedroom property in 76 percent of U.S. counties included in the analysis. The markets were ranked according to the best and worst potential returns on residential rental properties from an investor perspective as well as the most affordable and least affordable markets for leasing from a renter perspective. Daren Blomquist, vice president at RealtyTrac, observes that “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 across the country.” The analysis included 461 counties with a population of at least 100,000 and sufficient home price, income, and rental data. On average, fair market rents as set by HUD represented 28 percent of the estimated median household income. Meanwhile, monthly house payments on a median-priced home with a 10 percent down payment represented 24 percent of the estimated median income. “In some markets, buying may be more affordable than renting, but that doesn’t mean buying is truly affordable by traditional standards,” Blomquist concluded. “In those markets, renters are stuck behind a rock and hard place when it comes to deciding whether to try to buy or continue renting.” | Read More
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