Home prices are so high that many Americans would be financially better off renting, rather than buying a home. A recent study from Attom Data Solutions found that two thirds of US residents live in housing markets where it is better to make a monthly rent payment to a landlord than it is to make a payment to a mortgage company. And that is just the house; add on expensive property taxes and solicitor fees, and buying a house becomes a serious expense.
US Home Ownership In Decline
Rising house prices have resulted in a decade long decline in US homeownership – and it seems that some states have much more expensive house prices than other states. Dallas in particular stands out; a decade ago the median price of a Metroplex home in Dallas was around $150,900, but this soared up to $188,300 in 2014 – and the price is continuing to rise.
Now the median price of a home in Dallas is around $249,000, showing an increase of nearly $100,000 in 10 years. This could be why many Dallas residents are choosing to long-term rent, instead of buy, but it isn’t all doom and gloom. Realtors have noticed the rising demand for apartment living, which consequently brought about the increase of affordable luxury apartments in Dallas for rent that are suited to young adults, families, and the elderly.
Federal Tax Laws Pushing Prices Even Higher
High prices make it difficult for over half of Americans to afford a home, but high prices aren’t the only problem. New federal tax laws that there signed by the President on December 22nd limit how much property tax and mortgage interest can be deducted from taxpayers, pushing even more prospective buyers to rent instead.
Many young people are also cautious about borrowing the maximum amount they can borrow. This is because they are worried that they won’t be able to manage the monthly repayments, so they choose to rent as it seems like the least risky option.
It Is Still Better To Buy In Certain Areas
Despite rising house prices, it is still more affordable to buy a home than it is to rent in certain areas. To use Texas as an example; Arlington and Fort Worth are both more affordable places to buy a home, but it is worth noting that Tarrant County in Fort Worth is one of only nine US counties with a population of more than one million where buying is still the smartest option. On the other hand, Dallas, Denton and Collin are all better areas for renting.
All across America house prices are rising, and now the majority of Americans live in areas where it is more financially viable to rent a home. This could show a big shift in the way that US residents view living, especially the younger generation of adults who have never experienced owning a home. And this doesn’t seem to bother many millennials, who are more focused on saving money than finding a forever home.