It's Still More Affordable To Rent Than Buy In Most Bay Area Counties
A new report suggests it's still more affordable to rent than buy in the Bay Area. The study incorporates 2016 fair-market rent data from the US Department of Housing and Urban Development, wage data from the US Department of Labor Statistics and public records of home sales in 540 US counties, reports the Mercury News.
Rapid appreciation of home values in eight of the nine Bay Area counties has made it more affordable to rent than buy. Contra Costa County, especially inland parts of the county, is the only place where homes remain somewhat affordable.
Santa Clara County and Napa County are the only regions where wage growth outpaced home prices. Santa Clara County boasted wage growth of 6.8% last year and home appreciation of 5.9%, and Napa County had wage growth of 5.2% and home appreciation of 5%.
From 2012 to 2016, home prices far surpassed wage growth in all nine counties. Santa Clara County home prices have gone up 92% since 2012, while wages have only risen 16%. Contra Costa County home appreciation went up 113% while wages fell 4%.
Rising interest rates will further tilt the balance toward renting versus owning in the Bay Area, according to Attom Data Solutions SVP Daren Blomquist. [MN]