The rebound in home prices has come at a cost to buyers. Homes have become less affordable, a new report shows, but in most places, buying is still cheaper than renting.
February 20, 2014
The rebound in home prices has come at a cost to buyers.
Homes have become less affordable, a new report shows, but in most places, buying is still cheaper than renting.
The average monthly payment for a median-price three-bedroom home rose 21 percent from the end of 2012 to the end of 2013, according to the real-estate information and listing service RealtyTrac.
The increase was driven by a 10 percent bump in home prices and an increase in the 30-year mortgage rate from 3.35 percent to 4.46 percent.
Despite the increase, a mortgage payment, with escrow, still costs less than rent in most U.S. counties, RealtyTrac reports.
In Franklin County, the monthly cost to own a three-bedroom home costing the median price of $113,633 rose from $471 at the end of 2012 to $541 at the end of 2013, according to RealtyTrac.
In Delaware County, where the median-priced home cost $169,067, the cost to own rose from $699 to $805.
In Licking County, the cost to own a $119,444 home, the median cost there, rose from $509 to $569. In Fairfield County, the cost to own a $124,717 home, the median there, rose from $538 to $594.
In all central Ohio counties, monthly ownership costs are less than the $1,039 to rent a comparable home, according to RealtyTrac.
The most-expensive place to buy is San Francisco, where the cost to own a median-priced home is $4,762 a month. The least expensive: Genesee County, Mich. (Flint), where the ownership cost is $104 a month.
In calculating the monthly home payment, RealtyTrac included the mortgage, insurance, taxes and maintenance costs and subtracted the estimated income-tax benefit.
"A potent combination of rapidly rising home prices and the often-overlooked but significant uptick in interest rates in the second half of 2013 caused the monthly cost of owning a home using traditional
financing to jump substantially in many markets over the last year," said Daren Blomquist, vice president at RealtyTrac.
"The monthly cost of owning a home is still less than renting in the majority of markets, but the cost of financed homeownership is becoming dangerously disconnected with still-stagnant median incomes."