For most of the U.S. it’s now cheaper to own your own home than to rent. According to the 2021 Rental Affordability Report, just released by ATTOM Data Solutions, owning a median priced, 3-bedroom home costs less than renting a 3-bedroom dwelling in 63% of the country.
Factored into the report is rental data from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics, and home sales data collected by ATTOM.
While home prices rose faster than rent and wages in 2020, home ownership is more affordable in large part due to incredibly low interest rates. When buyers are able to secure mortgages below 3% it definitely makes monthly payments more competitive.
Todd Teta, Chief Product Officer of ATTOM Data Solutions, said "Declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the Coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it."
San Diego is one of the heavily-populated, major U.S. cities where home ownership costs more than renting, along with Los Angeles CA, Boston MA, Chicago IL, Dallas TX, Houston TX, New York NY, Orange County CA, Riverside CA, San Francisco CA, San Jose CA, and Seattle WA.
The median price of a home in San Diego reached an all-time high of $700,000 in December of 2020. Low interest rates and lack of housing are key factors in this astounding jump, and it’s anticipated that San Diego home prices will rise another 8.3% during 2021. San Diego has historically ranked #9 for the highest home prices in America.
Along with high home prices, San Diego is also one of the nation’s least affordable rental markets for counties with a population over 1 million. The ATTOM Report referenced these five counties where over half of a person's wages are needed to pay rent.
Average Weekly Percent of Wages Needed to Rent:
- Brooklyn NY - 62.5%
- Orange County CA – 60%
- Queens County NY - 56.3%
- San Diego County CA - 55.6%
- Contra Costa County CA (outside San Francisco) – 55%
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