Today, ATTOM released its ‘2024 Rental Affordability Report,’ presenting a comprehensive analysis of the current state of home rental and ownership in the United States. The report indicates that renting a median three-bedroom home is more affordable than owning a similarly-sized property in nearly 90% of the U.S. markets. This trend continues despite rents growing faster than home prices. A significant finding for our industry is that both renting and owning pose substantial financial burdens on average workers, consuming over a third of their wages in most county-level housing markets.
Data for St. Louis County is consistent with the report.
Since the report covered only counties with a population of 1 million people or greater, St. Louis County was the sole county from our area included. The report highlights that in St. Louis County, MO, renting remains more affordable compared to owning. This reflects the national trend, with median three-bedroom rents requiring only 24% of average local wages compared to higher percentages for home ownership costs. It’s worth noting that the affordability gap between renting and owning in St. Louis County is much narrower than in many counties in the U.S., particularly coastal areas.
Things may change soon though based upon trends shown.
The report reveals that in 2024, median rents for three-bedroom homes have risen more than single-family home prices in a majority of counties. This indicates a shift in the rental market dynamics, emphasizing the growing challenge for renters in finding affordable housing.
Rent vs. Wage Growth
An alarming trend noted in the report is that median three-bedroom rents are increasing faster than average local wages in over half of the markets analyzed. This disparity is a crucial factor contributing to the affordability crisis, as it indicates that wage growth is not keeping pace with rising housing costs.
Buying a Home: Long-Term Certainty vs. Short-Term Instability.
For those who have been following my articles over the past few years, I hope you’ve realized that I don’t blindly advocate for homeownership. I recognize that owning a home isn’t the best choice for everyone. In many cases, renting a home or an apartment is a better fit. However, considering the details in this report, it’s clear why buying a home can be advantageous for those in a position to do so. It offers the long-term certainty of fixed costs, contrasting sharply with the volatility of the rental market. This contrast is especially pertinent in light of the report’s findings that rent increases are outstripping wage growth.
Understanding Your Real Estate Options
At MORE REALTORS®, we pride ourselves on having a team of some of the most skilled and professional real estate agents in the St. Louis area. Our agents are dedicated to providing informed guidance tailored to each individual’s needs. Whether you’re considering buying or leasing, we’re here to offer insights and assistance based on your unique situation. For more information about our agents and the services we offer, please visit morerealtors.com. Alternatively, you can contact me directly at Dennis@STLRE.com, and I’d be happy to connect you with one of our knowledgeable real estate professionals.
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