Zillow: Renting is twice as expensive as buying

Recent research from Zillow's third-quarter income and home value data has indicated that it is more affordable to buy a home in most U.S. metro areas today than it was 15 years ago. Even for millennials who put down less money on a home, buying has still shown to be more affordable.

On the other hand, renters continue to pay an increasing share of their income to their landlords as rents soar and incomes remain flat.

Homebuyers who purchase the typical U.S. home at the nation's median income level are spending just 15.3% of their monthly income on the house payment, down from the historical norm of 22.1% during the pre-bubble period. Renters, in contrast, are spending 29.9% of their monthly income on rent according to the latest numbers. This has increased from a historical norm of 24.9%.

Young, first-time homebuyers who are earning less money in most areas and making smaller down payments can expend to spend slightly more of their income (17.4%) on mortgage payments. But thanks to continued low mortgage interest rates, homes for younger buyers remain affordable. The continued trend of rising rents across the country will likely drive more people into the home-buying market, but the difficulty of saving for a down payment may be the primary reason that halts them.

In time, Zillow analysts expect the allure of fixed housing payments and the ability to build wealth through home equity to draw more buyers out of rentals and into homeownership, especially as buying conditions continue to improve throughout the country.

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Source: http://www.housingwire.com/articles/32273-...