Renting and Buying: Priced out of homeownership? According to new data from the real estate technology platform Cadre, renting may be preferable to purchasing at the moment.
According to a new analysis by the real-estate technology platform Cadre, renting is a far cheaper and wiser option for many Americans today, given the high costs of homeownership.
With mortgage rates exceeding 7 percent, elevated home prices, and fierce competition among purchasers for a limited number of homes for sale, many renters who wish to purchase a home find it unaffordable.
The graph below from real estate technology platform Cadre illustrates the widening disparity between renting and owning since 2000.
Student Loan Repayment Plans: How to enroll for a repayment plan? Know the Procedure
Cadre discovered that purchasing was 62% more costly than renting in July 2023. Cadre’s data sources include CoStar Group, the St. Louis Federal Reserve, and Zillow.
Renting and Buying: Cadre’s founder and chief executive officer, Ryan Williams, stated that the company’s investments team analyzed the average monthly cost differential between proprietors and renters in the United States.
To compute the true cost of ownership, they also examined CoStar rent data and made assumptions based on average insurance costs, home prices, and mortgage rates, as well as the cost of home maintenance, property taxes, and closing costs.
“Interestingly, as of August 2023, our team discovered that the monthly cost differential between homeownership and renting reached its widest point since 2000, with homeownership being roughly 70% more expensive than renting,” Williams told MarketWatch.
In July, the median home price in the United States was $406,700, according to the National Association of Realtors.
According to Redfin, the median asking rental rent in August was $2,052. In September, the company estimated the median monthly mortgage payment to be $2,631.
