Leasing A Three-Bedroom Apartment Trumps Homeownership In 90% Of US Markets

Renting a three-bedroom apartment in the U.S. is more affordable than owning a similar sized home in nearly 90% of the markets around the country.

While both renting and owning a three-bedroom home are a significant financial burden for average workers, consuming more than one-third of their wages, rental rates still require a smaller portion of average wages, according to real estate data provider ATTOM's 2024 Rental Affordability Report.

"Finding an affordable home remains a daunting prospect around the country for average workers, regardless of whether they want to buy or rent. Continuously increasing home prices contribute to the escalation of rental costs, making both buying and renting properties a challenging endeavor across the United States," ATTOM CEO Rob Barber said. "But the latest data shows that even as rents are growing faster, they remain more affordable than owning."

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Over the past year, both rental rates and home prices continued to rise in most of the country. Home prices are out of reach for average workers, preventing people with marginal finances from getting mortgages and forcing them to rent. Home prices kept rising last year despite increasing mortgage rates, partially because of a limited supply of homes for sale.

The most affordable homeownership markets are still in the South and the Midwest, while the least affordable are in the West and Northeast.

The most affordable markets for owning are Wayne County (Detroit), Michigan, where 19% of average local wages are needed to own; Montgomery County, Alabama, where 23% of income is needed; St. Louis City/County, where 23% is needed; Bibb County (Macon), Georgia, at 23%; and Caddo Parish (Shreveport), Louisiana, 23%.

Aside from Wayne County, the counties with a population of at least 1 million that are the most affordable to own include Allegheny County (Pittsburgh), Pennsylvania, at 27%; Cuyahoga County (Cleveland), Ohio, at 27%; St. Louis County, Missouri, at 30%; and Harris County (Houston), Texas, at 35%.

The least affordable markets for owning are Marin County, California, outside of San Francisco, 164%; Santa Cruz County, California, 160%; Orange County, California, outside of Los Angeles, 136%; Kings County (Brooklyn), New York, 136%; and Honolulu County, Hawaii, 134%.

Median three-bedroom rents are increasing more than wages in more than half of the 338 counties analyzed in the report, including Los Angeles County, Harris County, Maricopa County (Phoenix), Arizona; San Diego County; and Orange County.

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