It makes more financial sense to rent than buy in Greater Houston, according to new research from ATTOM Data Solutions.
In its analysis, which incorporated 2017 rent data from HUD, wage data from the Bureau of Labor Statistics and public record sales deed data from 540 counties, ATTOM calculated what share of local wages were needed to buy and rent in Greater Houston’s counties. And in Brazoria, Fort Bend, Galveston and Harris Counties, renting was universally more affordable.
A changing housing market
Buying a home remains more affordable than renting in 66 percent of the U.S. housing markets that ATTOM analyzed, although Daren Blomquist, the firm’s senior vice president, stressed in his comments that the scenario could change.
“While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017,” Blomquist said. “In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year. Additionally, renting may end up being the lesser of two housing affordability evils in a growing number of high-priced markets.”
Indeed, it is interesting to look at the fine print of ATTOM’s analysis, which we have collected in the chart below. Between the four Greater Houston counties, only in Harris was the percentage of wages required to buy below 30 percent. In Fort Bend, homeowners are paying nearly half of their income to live in a median-priced home – far above the national standard.
Houston’s relatively affordable rent prices – though still requiring more than one-third of renters’ wages in Fort Bend and Galveston – may end up boding well for renters who aspire to home ownership, as they’ll have more income to save towards a down payment.
|County||Pct. Of Wages to Rent||Pct. Of Wages to Buy a Median-Priced Home||More Affordable to Buy or Rent|