Report: Renting a Home Is More Affordable Than Buying One in Phoenix

2019-01-18 | Phoenix New Times

Renting a three-bedroom home in the Phoenix metro area is generally more affordable than buying a median-priced home, according to a new report.

And it's not just Phoenix. It might be a better option for Arizonans to rent over buying in seven of the 10 counties analyzed by ATTOM Data Solutions, a property data management company.

Continue Reading

ATTOM analyzed data from 755 counties in the United States, including average rent prices from the U.S. Department of Housing and Urban Development and average weekly wages collected by the U.S. Department of Labor. Home prices came from ATTOM's own databases.

To find rental affordability, ATTOM calculated the average rent for a three-bedroom home as a percentage of the average monthly wage. For home-buying affordability, the company determined the average monthly house payment for a median-priced home as a percentage of monthly wage.

The results are grim for folks who might be considering buying a home, especially in big cities. Renting is more affordable than buying in the nation's 18 biggest counties and 37 of 40 counties with a population of 1 million or more, according to ATTOM. Of the 755 U.S. counties analyzed, 59 percent have more affordable rental rates when compared with house payments.

Jennifer von Pohlmann, director of content and PR at ATTOM Data Solutions, said in a statement: "With home price appreciation increasing annually at an average of 6.7 percent in those counties analyzed for this report and rental rates increasing an average of 3.5 percent, coupled with the fact that home prices are outpacing wages in 80 percent of the counties, renting a home is clearly becoming the more attractive option in this volatile housing market."

In Arizona, only Pinal, Cochise, and Yuma counties are listed as having better house-buying affordability. Among the counties in which renting is more affordable than buying: Maricopa, Pima, Coconino, Yavapai, Gila, Navajo, Pinal, and Mohave.

In Maricopa County, the median price for a home last year from January to November was $275,000. The average rent for a three-bedroom home was $1,319.

More affordable doesn't necessarily mean affordable. ATTOM's analysis comes shortly after a report late last year finding that Phoenix has the second-fastest growing rental rates in the nation. While Phoenix once ranked high on the cities with relatively affordable homes, the metro area is gradually sliding down that list.

And more affordable doesn't necessarily mean it's always the best option. For people who want to plant roots in Phoenix, home ownership could be the best bet with housing prices in the metro area steadily appreciating in the past few years.

Read on for ATTOM's data on 10 Arizona counties:

County: Maricopa

Metropolitan Statistical Area: Phoenix-Mesa-Scottsdale

Population: 4,018,143

Housing units: 1,688,555

2019 Three-Bedroom Rent: $1,661

2018 Three-Bedroom Rent: $1,574

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +5.5 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 37.7 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 42.7 percent

Jan to Nov 2018 YTD Home Sales Prices: $275,000

Cheaper to Buy or Rent: RENT

County: Pima

Metropolitan Statistical Area: Tucson

Population: 998,537

Housing Units: 446,769

2019 Three-Bedroom Rent: $1,388

2018 Three-Bedroom Rent: $1,319

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +5.2 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 36.2 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 40.4 percent

Jan to Nov 2018 YTD Home Sales Prices: $215,000

Cheaper to Buy or Rent: RENT

County: Cochise

Metropolitan Statistical Area: Sierra Vista-Douglas

Population: 129,647

Housing Units: 60,087

2019 Three-Bedroom Rent: $1,271

2018: Three Bedroom Rent: $1,239

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +2.6 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 33.8 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 28.8 percent

Jan to Nov 2018 YTD Home Sales Prices: $155,456

Cheaper to Buy or Rent: BUY

County: Coconino

Metropolitan Statistical Area: Flagstaff

Population: 136,701

Housing Units: 63,955

2019 Three-Bedroom Rent: $1,733

2018: Three Bedroom Rent: $1,545

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +12.2 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 49.5 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 65.2 percent

Jan to Nov 2018 YTD Home Sales Prices: $340,000

Cheaper to Buy or Rent: RENT

County: Yavapai

Metropolitan Statistical Area: Prescott

Population: 215,996

Housing Units: 111,731

2019 Three-Bedroom Rent: $1,450

2018: Three Bedroom Rent: $1,348

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +7.6 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 44.1 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 63.3 percent

Jan to Nov 2018 YTD Home Sales Prices: $306,854

Cheaper to Buy or Rent: RENT

County: Gila

Metropolitan Statistical Area: Payson

Population: 53,165

Housing Units: 32,952

2019 Three-Bedroom Rent: $1,198

2018: Three Bedroom Rent: $1,159

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +3.4 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 34.5 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 46.7 percent

Jan to Nov 2018 YTD Home Sales Prices: $235,000

Cheaper to Buy or Rent: RENT

County: Yuma

Metropolitan Statistical Area: Yuma

Population: 202,987

Housing Units: 89,330

2019 Three-Bedroom Rent: $1,243

2018: Three Bedroom Rent: $1,258

2019 vs. 2018 Three-Bedroom Rent Percentage Change: -1.2 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 36.9 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 35.2 percent

Jan to Nov 2018 YTD Home Sales Prices: $170,454

Cheaper to Buy or Rent: BUY

County: Navajo

Metropolitan Statistical Area: Show Low

Population: 107,656

Housing Units: 57,414

2019 Three-Bedroom Rent: $1,147

2018: Three Bedroom Rent: $1,043

2019 vs. 2018 Three-Bedroom Rent Percentage Change: 10.0 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 35.2 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 45.3 percent

Jan to Nov 2018 YTD Home Sales Prices: $215,000

Cheaper to Buy or Rent: RENT

County: Pinal

Metropolitan Statistical Area: Phoenix-Mesa-Scottsdale

Population: 389,772

Housing Units: 163,490

2019 Three-Bedroom Rent: $1,661

2018: Three Bedroom Rent: $1,574

2019 vs. 2018 Three-Bedroom Rent Percentage Change: +5.5 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 46.1 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 38.3 percent

Jan to Nov 2018 YTD Home Sales Prices: $200,000

Cheaper to Buy or Rent: BUY

County: Mohave

Metropolitan Statistical Area: Lake Havasu City-Kingman

Population: 203,362

Housing Units: 111,984

2019 Three-Bedroom Rent: $1,181

2018: Three Bedroom Rent: $1,205

2019 vs. 2018 Three-Bedroom Rent Percentage Change: -2.0 percent

2019 Rent Affordability (Percentage of Average Wages to Rent): 36.6 percent

YTD 2018 Home Affordability (Percentage of Wages to Buy Home - 3 Percent Down): 44.8 percent

Jan to Nov 2018 YTD Home Sales Prices: $214,900

Cheaper to Buy or Rent: RENT