Is it cheaper to rent or buy us property?
Photo credit: Cyndie
According to the National Association of Realtors, you may be better off buying US property. 48 per cent of members involved in lettings reported higher rents year-on-year in March 2014, an increase from the 46 per cent in February 2014.
With that rise in rental rates, homeownership is increasingly becoming a more attractive - and affordable - option. Indeed, sentiment about buying property in America, as in many other recovering markets, is improving.
"Confidence about the next six months also showed a slight improvement in March compared to February," notes NAR Chief Economist Lawrence Yun.
But markets vary across the country. Is buying really cheaper than renting?
Maybe not, according to other figures from Deutsche Bank, also published this month. The market's positive sentiment is also stemming from growing property values, which are bolstered by strong demand among buyers.
The bank's research considers the average monthly rent as a percentage of estimated mortgage payments in 54 metropolitan areas and shows that those rising house prices are in turn making renting more favourable for buyers.
If the percentage calculated is above 100 per cent, buying is more favourable. Cleveland leads the way as the most affordable homeownership market, with a percentage of 155 per cent, meaning that for every $1 a buyer would spend in the metro, a renter would spend $1.55.
Oakland-East Bay, California, on the other hand, was the most favourable place to rent with a figure of just 49 per cent. Buyers in higher tax brackets will find it easier to buy a home, according to the bank, while those facing higher mortgage rates will find renting the better option.
21 out of 54 areas studied by the bank are considered to be more favourable for renters, with 33 considered better for buyers. Rising house prices may be making property more expensive, but the rental market does not appear to have won the battle yet. Generation Rent, it seems, has several years yet to grow.