The cost to rent a home is rising at the fastest clip in years, as landlords bounce back from their struggles earlier in the COVID-19 pandemic. For some households, the surge in rent prices will put homeownership even further out of reach.
The overall median rent nationwide as of January was $1,789 per month, according to a new report from Realtor.com. That represents a 19.8% increase over the previous year. January was the eighth consecutive month in which rents rose on an annual basis by more than 10%.
In many cities, buying a home is more affordable The Realtor.com report compared the cost to purchase a home with the cost of rent across the 50 largest cities nationwide. In 26 of these locations, buying a home was cheaper than renting. On average, buying a home in these areas was more than 20% cheaper than renting, in terms of the monthly expenses.
“For young Americans like Gen Z who may have moved home to save money during COVID, renting in a big tech city offers flexibility and relative affordability even as rents recover in these areas,” Hale said. “As the gap in homeownership rates for Black and White Americans has widened, it is important to understand the unique challenges that minority home buyers face,” Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, said in the report.
“‘ Housing affordability and low inventory has made it even more challenging for all buyers to enter into homeownership, but even more so for Black Americans.’”