Tenants and Homeowners Believe Renting Is More Affordable Than Buying

Realtor.com reports that the majority of renters believe that renting is more affordable than buying a home, and increasingly more homeowners feel the same way.

More than 82% of tenants think renting is cheaper than purchasing a home, according to a recent Freddie Mac report. That's the highest it's been since the government-sponsored enterprise, which backs mortgages, created the survey in 2016. Meanwhile, 17% of homeowners now feel the same way. That may be a much smaller portion, but it's a significant jump compared with about 10% nearly a year earlier.

"This change is surprising given that the costs of financing a home have actually declined in many parts of the country in the last year," says Danielle Hale, chief economist of realtor.com®. According to the company's data, 74 of the 100 largest U.S. metros saw lower costs in May.

She acknowledged, though, that for most people, it's not the monthly mortgage payments that are an issue, but the upfront cash required to buy a home. And it's not just those struggling to make ends meet who have difficulty with that. About 72% of middle-income renters said coming up with a down payment and closing costs was an obstacle they faced in buying a home; in fact, 39% of them said it was a major hurdle.

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