Markets Where Buying A Home Is Much Better Than Renting

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Buying a home is not only 23% cheaper than renting nationally, it is also cheaper than renting in 98 of the nation's top 100 markets. Metros in Texas, Florida and Louisiana dominate the top ten list of places where young households will find buying an easier call. In Houston, for instance, it is 46% cheaper for younger buyers (ages 25-34) to buy than rent.

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Markets Where Buying A Home Is Much Better Than Renting

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Neighborhoods around National Football League stadiums tend to have homes that are more expensive both in sales and rental value, but new stadiums built in the last decade, by and large, have failed to lift the fortunes of homes in nearby areas. In other words, owning a home near a stadium is nice, but if they build one down the street, don’t get your hopes up. During the last 10 years, five new pro football stadiums have opened and none, so far, has had a noticeable impact in raising home values in its immediate vicinity (a two mile radius).

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Low inventory is taking a toll on the affordability of all home segments, but especially starter homes. At the bottom of the housing market in 2012, starter homes were nearly affordable, primarily because starter prices were discounted: homebuyers needed only to shell out 32.2% of their income to buy the median priced starter home. Now, starter homebuyers would need to dedicate 37.7% of their income – a 5.6 percentage point increase.

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Are you a superhero looking for a new city to rescue? Better head to San Francisco, CA, the number one city on our list. Using an index that includes tall buildings to leap over, plenty of law enforcement buddies, and mass media (hey, even superheroes need a day job!), we were able to hone in on which cities are prime for a hero on the move. The good news? San Francisco checks all the boxes on our Superhero Index. The bad news? With a $1 million median price tag on homes for sale in San Francisco, only Bruce Wayne (ahem, Batman) could afford to buy. Sorry, Spider-Man and Superman — those newspaper gigs won’t cover skyrocketing rents in San Francisco. Maybe try moving across the Bay to Oakland, CA? It’s the fifth-best city for superheroes on our list.

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Why is inventory so low, especially for starter and trade-up homes? Three reasons: First, investors bought many of the foreclosed homes during the recession and turned into rentals. Second, a larger share of lower-priced are homes are still underwater compared to premium homes, which means that these homeowners are unlikely to sell and take a loss. Third, and most importantly, rising prices are creating homebuyer gridlock. In other words, the spread of homes prices, specifically the growing difference between premium homes prices and trade-up home prices, is likely causing a decrease in trade-up home inventory.

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The median listed home price in Super Tuesday states has risen 50.1%, during the last four years and now is worth 7.7% more than the median home in non-voting states – the Super Tuesday median home was worth 2.8% less in 2011. We also found Super Tuesday states were more stable when it came to creating jobs, saw better wage growth and when it came to home prices, saw a recovery that valued the median Super Tuesday home at a higher level than the rest of the country.

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In the past year, affordability for homebuyers has fallen in 89 of the 100 largest housing markets thanks to rising home prices and stagnant income growth in many metros. The cost of commuting and utilities can also play a big role depending on where you live. California continues to be a tough housing market for middle-class homebuyers. Seven of the 10 least affordable housing markets are located in the golden state, with Miami, Fairfield County, and Honolulu being the only non-California metros to make the list. In these least affordable markets, middle-class households would need to spend at least 42% of their monthly income to buy the median priced home. But in pricey San Francisco, that number jumps to an incredible 77% of income. San Jose, Miami, Orange County, San Diego, and Los Angeles follow with middle-class homebuyers needing to fork over at least 50% of their monthly income on housing.

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Discover the world of foreclosures and real estate with David Litt Foreclosures, your go-to person for optimising profits and providing individualised solutions. Put your trust in David to navigate the market with skill and a commitment to your success. With a proven track record of accomplishment, David is committed to surpassing your expectations and helping you reach your real estate goals. David Litt outstanding skill ensures a seamless and gratifying experience every step of the way.

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