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Report: Despite rising prices, owning still cheaper than renting

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The average monthly house payment for a three-bedroom home jumped more than $150 in the fourth quarter of 2013 compared with the final quarter of 2012, according to a recent affordability report that analyzed sales data from 325 counties nationwide.

That increase was driven by rising median prices, but also a 33 percent increase in the average interest rate for a 30-year fixed-rate mortgage, according to California-based RealtyTrac Inc., the author of the report.

RealtyTrac used an interest rate of 4.46 percent compared with 3.35 percent at the end of 2012. The estimated monthly house payment included mortgage, insurance, taxes and maintenance, while subtracting the estimated income tax benefit.

However, the monthly cost of owning a home is still less than fair-market rent of a three-bedroom home in the majority of markets, according to RealtyTrac. That was true in 296 of the 325 counties, or 91 percent.

The latter includes all five counties in the Business Journal’s coverage area.

Here is what RealtyTrac reported for the midstate (in order by population):

• Lancaster County: The median price was down 1 percent in the fourth quarter of 2013 ($153,133), monthly house payments rose 9 percent in 2013 to $729 and qualifying income for purchase of a median-priced home was $35,001 compared with $32,175 in 2012. Also, fair-market rent for a three-bedroom home has increased to $1,157 in 2014 from $1,135, while qualifying income for rent is $41,652 compared with $40,860 last year.

• York County: The median price was down 2 percent in the fourth quarter ($129,350), monthly house payments rose 8 percent to $616 in 2013 and qualifying income for purchase was $29,565 compared with $27,419 in 2012. Fair-market rent increased to $1,080 in 2014 from $1,062 last year, while qualifying income for rent is $38,880 compared with $38,232 last year.

• Dauphin County: The median price was up 3 percent to $126,133, monthly house payments rose 13 percent to $601 in 2013 and qualifying income for purchase rose to $28,830 from $25,417 in 2012. Fair-market rent decreased to $1,090 this year compared with $1,160 last year, while qualifying income for rent fell to $39,240 from $41,760 last year.

• Cumberland County: The median price was up 6 percent to $179,486, monthly house payments rose 16 percent to $855 in 2013 and qualifying income for purchase jumped to $41,025 compared with $35,224 in 2012. Fair-market rent has decreased 6 percent to $1,090 from $1,160, while qualifying income for rent fell to $39,240 from $41,760 last year.

• Lebanon County: The median price was down 7 percent in the fourth quarter ($142,739), monthly house payments rose 2 percent to $680 in 2013 and qualifying income to purchase increased to $42,626 compared with $31,909 in 2012. Fair-market rent fell 13 percent to $916, while qualifying income for rent dipped to $32,976 from $38,016.

Several California counties, two in New York and others in the Chicago metro area and Denver were among the minority where rent was cheaper, according to RealtyTrac. But those 29 counties accounted for 20 percent of the population for all 325 counties analyzed.

Across all the counties, the average income needed to qualify for a median-priced home in the fourth quarter of 2013 was $41,544, up from an average minimum income of $34,262 in the fourth quarter of 2012, according to RealtyTrac.

The average qualifying income to rent a three-bedroom home at fair market rents for 2014 was $43,892, up from $43,527 in 2013.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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