Homeownership is More Affordable Than Renting in 2025—But There’s a Catch
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If your buyers are still on the fence about buying versus renting, here’s something to wake them up: In nearly 60% of U.S. counties, owning a home is now more affordable than renting.
But before you start blasting this out in your marketing, there’s a catch—this applies to rentals with three or more bedrooms. Plus, down payments remain a major hurdle, and in some markets, homeownership still consumes over half of a buyer’s income.
That’s according to ATTOM’s 2025 Rental Affordability Report, which breaks down where homeownership makes the most sense and where renting still wins. Let’s unpack the key takeaways and how real estate agents can use this data to guide their clients.
Where Buying Wins in 2025
Despite high home prices and mortgage rates, owning a home is the better financial move in the majority of U.S. markets. Here’s where buyers get the best deal:
- Midwest is a buyer’s paradise – In 80% of counties, owning a home beats renting on affordability. Metro areas like Detroit (Wayne County, MI) and Pittsburgh (Allegheny County, PA) have some of the lowest ownership costs relative to wages.
- South is also a win for buyers – Homeownership is more affordable than renting in 60% of counties, with hotspots like Birmingham, AL (Jefferson County) and Houston, TX (Harris County) standing out.
- Select big metros favor ownership – In major counties like Cook (Chicago, IL), Maricopa (Phoenix, AZ), and Riverside (CA), the numbers tip toward buying rather than renting.
So what’s the holdup? For many, it’s the down payment. Even in markets where homeownership is more affordable, the down payment, as well as closing costs, are still pricing out a ton of would-be buyers.
Where Renting Still Rules
In the West and parts of the Northeast, renting a three-bedroom unit still costs less than owning a median-priced home.
- California is a renter’s game – In 80% of counties, renting is cheaper than owning. The worst affordability gaps? San Francisco, Santa Clara (San Jose), and Los Angeles.
- Hawaii isn’t far behind – With ownership costs exceeding 100% of wages in Honolulu County, renting remains the only option for most residents.
- High-cost metros still favor renters – In places like Honolulu County, HI, and Loudoun County, VA (outside Washington, D.C.), the average three-bedroom rent requires a smaller share of the median household income compared to major homeownership expenses for typical homes purchased in 2024.
Why Wages Matter More Than Ever
The real game-changer? Wage growth. While home prices have jumped in two-thirds of the counties analyzed, wage growth is finally catching up in certain areas.
- In 72% of counties, wages are rising faster than rents. That includes big markets like Los Angeles, Chicago, and Houston.
- But in 52% of counties, home prices are still outpacing wages. Miami, San Diego, and Orange County are prime examples where affordability remains a challenge.
This means agents need to focus on real income vs. real estate costs when advising buyers.
Someone earning more in a rising wage market could afford homeownership even if prices seem high. On the flip side, someone in a slow-wage-growth area may still struggle, even if homes appear “affordable.”
Keep in mind, too, that your buyer’s income may not reflect that of the area in general; if they work remotely or as an independent contractor, their income growth may be very different from what those employed in the area might expect (more or less).
What This Means for Agents
The affordability debate isn’t black and white, and your buyers need to understand the full picture. Here’s how you can use this data:
- Factor in the number of bedrooms needed – ATTOM’s report is based on the median cost of a three-bedroom rental in each market. If your buyer needs three bedrooms or more, use this data to highlight the financial advantages of buying a home versus renting. The conversation changes if they only need two bedrooms.
- Localize your messaging – Use these trends to show how buying stacks up against renting in your specific market. Data-driven posts (with strong hooks) get engagement.
- Address the down payment hurdle – Even if homeownership is “more affordable,” down payments and closing costs remain a huge obstacle. Highlight creative financing options, down payment assistance programs, and lender partnerships.
- Educate on long-term value – If someone can afford the initial cost, show them the long-term benefits of buying over renting—building equity, tax benefits, and stabilizing housing costs.
- Factor in wage growth – If wages are rising in your market, use that to reassure your buyers—not so they’ll walk into an unsustainable financial situation but to call their attention to potential improvements in the affordability of their home in years to come.
Bottom line? The affordability conversation has shifted. Buying beats renting (a three-bedroom unit) in most of the country—but only if your clients can overcome the down payment barrier. And that doesn’t even take into account the full cost of homeownership, including:
- Property taxes
- Utilities
- Homeowners insurance
- Home maintenance and repair costs (interior and exterior)
- HOA fees
You want your buyers going into homeownership with their eyes open, so they can avoid any unpleasant surprises during their first year (and beyond). Position yourself as the expert who can guide them along the way, and you’ll win in 2025.
Posted by Sarah Lentz | Feb 7, 2025 | Housing Market
https://nowbam.com/homeownership-is-more-affordable-than-renting-in-2025-but-theres-a-catch/
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