SEATTLE, April 28, 2017 /PRNewswire/ -- Rent is so
high that a typical renter in the U.S. can purchase a home nearly
50 percent more expensive than the median valued home and keep the
same monthly housing budget, according to a new Zillow®
analysis.
The median rent in the U.S. is $1,416 per month, which is enough to cover the
monthly expenses associated with owning a $289,505 home. The median U.S. home value is
$196,500.
Rent is more expensive than ever before. Affordability is a
growing concern across the country, and rent requires almost half
of the median income in some of the nation's most expensive
markets. A mortgage payment is cheaper than a rental payment on a
monthly basis, but saving enough money for the down payment is
holding back many renters from crossing over into
homeownership.
Zillow analyzed the median rent payment in cities across the
country to determine how much home a prospective buyer could afford
without spending more on a mortgage than they were currently
spending on rent. Zillow factored in all monthly homeownership
costs, such as property taxes, maintenance and
insurancei. In 37 of the 50 cities Zillow analyzed,
renters could buy a home worth more than the median valued home in
their city without spending more on monthly housing costs.
Renters paying the median rent in Cleveland and Milwaukee can afford to buy a home more than
twice as expensive as the local median home value. In Cleveland, prospective buyers can buy a home
valued at $174,194 while keeping all
monthly housing costs the same -- this represents more than 80
percent of homes currently on the market.
San Francisco is one of the
only cities in the country where a monthly rental payment would not
cover the costs of owning the median valued home. Renters in
San Francisco who want to keep
monthly expenses the same would have to buy a home valued at
$865,857, representing just 23
percent of homes currently on the market. The median home value in
the city of San Francisco is over
$1 million.
"Renters hesitant to enter the home buying market for fear of
not being able to find an affordable home should be encouraged to
discover they may have more options than they thought," said Zillow
Chief Economist Dr. Svenja Gudell.
"However, it's worth noting that many of the more affordable homes
for sale may be older, smaller and/or located in less-desirable
neighborhoods than they might like. The decision between buying and
renting is a financial trade-off between saving more each month on
a mortgage payment versus spending more on rent but taking
advantage of the location and lifestyle amenities urban renting
often offers. Recent slowdowns in rent growth may take some of the
edge off for renters saving to become homeowners. This is good
news, since saving a down payment, qualifying for a loan and
finding a home available at a manageable price remain hurdles for
millions of aspiring buyers."
Nearly half of all buyers are entering the market for the
first-time, according to the 2016 Zillow Group Report on Consumer
Housing Trends. The majority of all buyers stay within the same
city when they move.
City
|
Zillow
Rent
Indexii (ZRI),
March 2017
|
Zillow
Home
Value Indexiii (ZHVI), March
2017
|
Value of
Home
Affordable without
Increasing Monthly
Housing Costs
|
Share of
Available
Inventory
|
United
States
|
$1,416
|
$196,500
|
$289,505
|
56.8%
|
New York,
NY
|
$2,372
|
$650,000
|
$484,962
|
28.7%
|
Los Angeles,
CA
|
$2,863
|
$622,900
|
$585,348
|
27.6%
|
Chicago,
IL
|
$1,650
|
$220,900
|
$337,347
|
57.1%
|
Philadelphia,
PA
|
$1,218
|
$136,100
|
$249,023
|
71.9%
|
Phoenix,
AZ
|
$1,256
|
$208,600
|
$256,793
|
40.6%
|
Las Vegas,
NV
|
$1,245
|
$212,500
|
$254,544
|
47.5%
|
San Diego,
CA
|
$2,503
|
$558,600
|
$511,745
|
31.3%
|
Dallas, TX
|
$1,393
|
$163,200
|
$284,803
|
24.7%
|
San Jose,
CA
|
$3,310
|
$862,800
|
$676,739
|
28.3%
|
Jacksonville,
FL
|
$1,171
|
$148,400
|
$239,414
|
59.1%
|
San Francisco,
CA
|
$4,235
|
$1,167,200
|
$865,857
|
22.8%
|
Austin, TX
|
$1,848
|
$316,800
|
$377,829
|
33.2%
|
Detroit,
MI
|
$751
|
$
39,100
|
$153,544
|
92.2%
|
Columbus,
OH
|
$1,150
|
$127,400
|
$235,121
|
71.2%
|
Memphis,
TN
|
$851
|
$
80,200
|
$173,989
|
73.5%
|
Charlotte,
NC
|
$1,309
|
$181,200
|
$267,629
|
37.9%
|
El Paso,
TX
|
$998
|
$113,800
|
$204,044
|
64.5%
|
Boston, MA
|
$2,634
|
$542,100
|
$538,529
|
23.4%
|
Seattle,
WA
|
$2,540
|
$638,100
|
$519,310
|
26.5%
|
Baltimore,
MD
|
$1,301
|
$124,100
|
$265,993
|
79.2%
|
Denver, CO
|
$2,000
|
$377,500
|
$408,906
|
31.2%
|
Washington,
DC
|
$2,635
|
$559,200
|
$538,733
|
45.3%
|
Nashville,
TN
|
$1,550
|
$223,800
|
$316,902
|
38.8%
|
Milwaukee,
WI
|
$1,138
|
$105,700
|
$232,667
|
86.0%
|
Tucson, AZ
|
$1,080
|
$162,000
|
$220,809
|
48.1%
|
Portland,
OR
|
$1,895
|
$414,800
|
$387,438
|
31.3%
|
Omaha, NE
|
$1,308
|
$151,700
|
$267,424
|
49.4%
|
Albuquerque,
NM
|
$1,205
|
$187,500
|
$246,366
|
56.8%
|
Fresno, CA
|
$1,256
|
$209,600
|
$256,793
|
55.6%
|
Sacramento,
CA
|
$1,543
|
$293,600
|
$315,471
|
60.5%
|
Mesa, AZ
|
$1,289
|
$219,100
|
$263,540
|
47.2%
|
Long Beach,
CA
|
$2,459
|
$548,400
|
$502,749
|
46.7%
|
Kansas City,
MO
|
$1,042
|
$119,400
|
$213,040
|
53.6%
|
Virginia Beach,
VA
|
$1,562
|
$255,900
|
$319,355
|
57.2%
|
Colorado Springs,
CO
|
$1,425
|
$246,800
|
$291,345
|
32.2%
|
Atlanta,
GA
|
$1,510
|
$206,800
|
$308,724
|
46.6%
|
Miami, FL
|
$2,093
|
$299,900
|
$427,920
|
45.4%
|
Oakland,
CA
|
$2,973
|
$676,900
|
$607,838
|
52.8%
|
Cleveland,
OH
|
$852
|
$
56,300
|
$174,194
|
81.9%
|
Honolulu,
HI
|
$2,438
|
$671,800
|
$498,456
|
36.5%
|
Minneapolis,
MN
|
$1,617
|
$231,200
|
$330,600
|
50.3%
|
Baton Rouge,
LA
|
$1,342
|
$155,800
|
$274,376
|
60.3%
|
New Orleans,
LA
|
$1,377
|
$173,800
|
$281,531
|
47.0%
|
Arlington,
TX
|
$1,465
|
$176,000
|
$299,523
|
57.0%
|
Raleigh,
NC
|
$1,400
|
$221,000
|
$286,234
|
28.0%
|
Wichita,
KS
|
$947
|
$121,000
|
$193,617
|
57.7%
|
Tampa, FL
|
$1,347
|
$182,700
|
$275,398
|
46.3%
|
Anaheim,
CA
|
$2,642
|
$560,200
|
$540,164
|
31.7%
|
Santa Ana,
CA
|
$2,490
|
$493,900
|
$509,087
|
42.0%
|
Aurora, CO
|
$1,783
|
$281,000
|
$364,539
|
56.0%
|
Zillow
Zillow® is the leading real estate and rental
marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Launched in 2006, Zillow is owned and operated by Zillow
Group (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
________________________________
i This analysis assumes a 20% down payment, and property
taxes of 1% of the home value annually, maintenance costs of 1% of
the home value annually, and homeowners' insurance of 0.5% each
year.
ii The Zillow Rent Index (ZRI) is the median Rent
Zestimate® (estimated monthly rental price) for a given geographic
area on a given day, and includes the value of all single-family
residences, condominiums, cooperatives and apartments in Zillow's
database, regardless of whether they are currently listed for rent.
It is expressed in dollars.
iii The Zillow Home Value Index (ZHVI) is the median
estimated home value for a given geographic area on a given day and
includes the value of all single-family residences, condominiums
and cooperatives, regardless of whether they sold within a given
period. It is expressed in dollars, and seasonally adjusted.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/renters-can-buy-without-increasing-their-monthly-housing-costs-300447757.html
SOURCE Zillow, Inc.