The average three-bedroom rental is more affordable than owning a comparably sized median-priced home in 95% of the 222 U.S. counties analyzed by ATTOM’s 2023 Rental Affordability Report. Consuming more than one-third of average wages in most major housing markets, both renting and owning a three-bedroom home are significant financial burdens, according to the report.
The report included counties with a population of 100,000 or more, at least 100 sales from January through November of 2022, and sufficient data. In almost three-quarters of markets, average fair market rents are increasing more than average local wages in 156 of the 222 counties (70%) studied. These include Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; and San Diego County and Orange County (outside Los Angeles), California.
In 66 of the 222 counties, average local wages are growing faster than rents, including in Maricopa County (Phoenix), Arizona; Dallas County, Texas; Clark County (Las Vegas), Nevada; Tarrant County (Fort Worth), Texas; and Hillsborough County (Tampa), Florida.
In over 90% of the nation, or 207 of the 222 counties analyzed, home prices are rising faster than wages, according to the report. These include Los Angeles County, Harris County, Maricopa County, San Diego County, and Orange County. In just 15 of the 222 counties (7%), average weekly wages are rising faster than median home prices.
Although rents have risen faster than home prices in roughly half the U.S. over the past year, average rents still require a significantly smaller portion of wages than major homeownership expenses. "What a difference a year makes," says Rick Sharga, executive vice president of market intelligence for ATTOM.
"Last year our study concluded that it was more affordable to own than to rent in 60% of the markets analyzed. But with mortgage rates doubling, monthly payments for new homeowners rose by 45% to 50% compared to a year ago, even though home price appreciation has slowed down dramatically. This has made renting more affordable in the majority of markets, despite rental rates continuing to rise over the past year."
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