The two thirds of the nation’ busiest housing markets, Buying a house is more affordable than renting. But according to the Bay Area housing report, the scene is entirely different.
Even with the shocking increases in house rents in recent years, it is still better to rent a house rather than buying one in states eight region’s out of the nine counties. Only in the Contra Costa County buying a home remains relatively affordable, especially in inland areas.
According to the conclusions of a new report which was drawn on 2016 fair-market rent data from the America’s Department of Housing and Urban Development and wage data from the American Bureau of Labor Statistics, along with public records for home sales in 540 State counties. The report does not consider long-term financial advantages of home ownership, only what it takes to cross the first hurdle and simply buy a house.
“ The prices of home in the Bay Area have become so high and so quickly that renting a house has become a better option,” said Daren Blomquist, senior vice president of Irvine-based Attom Data Solutions, which analyzed the numbers and wrote the report. “That is not to say that renting is affordable, but it’s become a more affordable option in most of the Bay Area counties.”
How does he explain the trend?
“Nationwide, the home prices are consistently out running the rent growth,” Blomquist said. “Prices for the most of the parts of the state have consistently out raced wage growth as well as during the housing recovery. And now we have reached a point where the trend has created a sharp divide between the price of the house and what the average wage earner can afford.”
In 2016 Bay Area’s, Santa Clara was one of only two counties where an increase in wage growth, up to 6.8 percent, had out raced home appreciation, up 5.9 percent.
That said, renting still poses a challenge for many wage earners. According to the reports, Marin County is the most rent-challenged county in the America. The average weekly wage there is $1,243, but the median rent for a three-bedroom home in 2017 is $4,250 — requiring that the typical earner puts about 77 percent of his or her gross pay toward rent for a home of that size.
AMandeep
