Heres Where Its Cheaper To Buy Than Rent In Houston Metro – Houston, TX Patch

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HOUSTON, TX — Home prices are rising faster than rent in most of the country, including the Houston metro, but buying is still more affordable than renting in Harris County, according to a report from ATTOM.

While home ownership is more affordable than renting in most of the country, Houston is an outlier among the United States’ largest metros, where renting is usually more affordable, the study said.

The report found that renting is more affordable for average wage earners in 21 of the nation’s 25 most populated counties and in 35 of 42 counties in the report with a population of at least 1 million people. This includes several counties comparable to Harris County: Los Angeles County, California; Cook County (Chicago), Illinois; Maricopa County (Phoenix), Arizona; San Diego County, California; and Orange County, California (outside Los Angeles).

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ATTOM used data from the U.S. Department of Housing and Urban Development and the Bureau of Labor Statistics in its study. To determine rental affordability, ATTOM took average fair market rent for a three-bedroom property as a percentage of the average monthly wage in the same market. The affordability of home ownership is calculated as the monthly house payment for a median-priced home, which is based on a 3 percent down payment and includes mortgage, property tax, homeowner’s insurance and private mortgage insurance, as a percentage of the average monthly wage. Average monthly wages were calculated using average weekly wages.

The average home price in Harris County for houses sold between January and November 2021 was $277,500, while the average weekly wage for workers in the county was $1,388. The average monthly house payment in Harris County is 28.9 percent of the average monthly wages, according to the study.

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Average rent in Harris County for 2022 is $1,781 per month.

Among other counties in the Houston metro, home ownership is more affordable in Galveston, Waller and Liberty counties, while renting is more affordable in Montgomery, Fort Bend and Brazoria counties.

Here is the housing, rent and wage information used in the study for those counties:

Montgomery County

  • 2021 home affordability (based on 3 percent down payment): 39.6 percent
  • 2022 three-bedroom rent: $1,781
  • Jan.-Nov. 2021 home sales prices: $317,449
  • 2021 weekly wages: $1,186

Fort Bend County

  • 2021 home affordability (based on 3 percent down payment): 46.9 percent
  • 2022 three-bedroom rent: $1,781
  • Jan.-Nov. 2021 home sales prices: $338,294
  • 2021 weekly wages: $1,006

Galveston County

  • 2021 home affordability (based on 3 percent down payment): 39.8 percent
  • 2022 three-bedroom rent: $1,781
  • Jan.-Nov. 2021 home sales prices: $298,125
  • 2021 weekly wages: $1,009

Brazoria County

  • 2021 home affordability (based on 3 percent down payment): 34.8 percent
  • 2022 three-bedroom rent: $1,677
  • Jan.-Nov. 2021 home sales prices: $276,800
  • 2021 weekly wages: $1,144

Liberty County

  • 2021 home affordability (based on 3 percent down payment): 31.5 percent
  • 2022 three-bedroom rent: $1,781
  • Jan.-Nov. 2021 home sales prices: $208,995
  • 2021 weekly wages: $915

Waller County

  • 2021 home affordability (based on 3 percent down payment): 38.9 percent
  • 2022 three-bedroom rent: $1,781
  • Jan.-Nov. 2021 home sales prices: $292,300
  • 2021 weekly wages: $961

Increasing home prices are closing the gap between affordability of ownership and renting in Harris County and across the country. In 1,015 of 1,154 counties in the study, median prices for three-bedroom homes are increasing more than average three-bedroom rents.

Prices went up more than 10 percent in most of the country over the past year, according to the study, which attributes the spike to home buyers chasing a tight supply of houses, partly because of the COVID-19 pandemic. That’s been partly offset by an increase of 8 percent in average wages and interest rates near 3 percent.

Still, national affordability trends are shifting more toward renters, which could ease price increases in 2022, according to ATTOM Chief Product Officer Todd Teta.

“Prices can only go up by so much more before renting becomes financially easier,” Teta said in a release. “For now, though, rising wages and interest rates around 3 percent are enough to offset recent price run-ups and keep ownership on the plus side of the affordability ledger compared to renting.”

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