Renting is becoming the better option in many large US cities

Miami /
Dec.December 14, 2016 03:00 PM

Millennials fretting over the high costs of buying a first home, fear no more: renting may be the better financial option anyway.

A new report shows the growth of home prices is outpacing that of rents across many major metropolitan areas in the United States, which could be yet another factor sinking the country’s historically low rate of homeownership.

The Wall Street Journal reported that Florida International University and Florida Atlantic University just released their third-quarter housing index that compares housing prices and rents in 23 major cities, including Miami.

Of all 23, the Journal reported, homes were becoming more expensive faster than rents were rising. Nationwide, the cost of buying a home spiked 5.5 percent year-over-year September, while rents jumped only 3 percent.

Miami crossed the threshold for renters getting a better deal in 2014, according to the index, and the gap between housing costs and lease rates has continued to grow since then.

That trend doesn’t appear to be headed for a change in the near future, either: developers are about to deliver the largest influx of apartments in Miami-Dade County’s history this year — a supply boom that will likely keep rent growth at a moderate rate, experts say.

Meanwhile, the county’s rising home costs have showed no sign of stopping, even as brokers call for sellers to moderate their expectations and lower asking prices.

The trend has also brought the nation as a whole closer to the tipping point for being renter friendly, though it’s still on the home buying side of the chart for now.

Cities where buying is still the better option, according to the Journal: Atlanta, Boston, Chicago, Cleveland, Los Angeles, New York and Philadelphia. [Wall Street Journal]Sean Stewart-Muniz


Related Articles

arrow_forward_ios
Miami skyline
South Florida home sales keep falling as price growth slows
South Florida home sales keep falling as price growth slows
(Illustration by The Real Deal with Getty)
“It’s not dead, it’s just different.” South Florida resi slowdown persists
“It’s not dead, it’s just different.” South Florida resi slowdown persists
Danielle Hale
Slowdown is “paradoxical:” Realtor.com’s chief economist on Miami housing market’s future
Slowdown is “paradoxical:” Realtor.com’s chief economist on Miami housing market’s future
From left: Ansorg Development's Karl-Ulrich Ansorg, Tulip Group's Kobi Elbaz, Ofir Gabriel, and Amit Kort in front of 234-264 Northeast 34th Street in Miami (Getty, Google Maps, YouTube/Tulip Group Thailand, usbotschaftberlin, Public domain - via Wikimedia Commons)
Inside look at planned Edgewater mixed-use condo tower
Inside look at planned Edgewater mixed-use condo tower
Florida Atlantic University processor Ken Johnson and Brown Harris Stevens' Sheila Rojas (Florida Atlantic University, Brown Harris Stevens, Getty)
Record rent hikes had slowed. Ian may change that
Record rent hikes had slowed. Ian may change that
Ron DeSantis and Peter Thiel (Illustration by The Real Deal with Getty)
Peter Thiel on Florida real estate: “becoming like California”
Peter Thiel on Florida real estate: “becoming like California”
Affiliated Development co-founder Nick Rojo along with 9445 Fontainebleau Boulevard in Miami (left) and the Bohemian apartment project in Lake Worth Beach (right) (Getty Images, Affiliated Development, Google Maps, MSA Architects)
“Slamming on the brakes”: South Florida’s record rent hikes slow
“Slamming on the brakes”: South Florida’s record rent hikes slow
Clockwise from top left: One Sotheby’s Jorge Uribe, Compass' Ida Schwartz, Fortune International Group's Edgardo Defortuna and Royal Palm Companies' Dan Kodsi (Illustration by Kevin Rebong for The Real Deal)
Slowdown hits South Florida’s hot resi market: Here’s what that means
Slowdown hits South Florida’s hot resi market: Here’s what that means
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...