While buying a home has been less expensive than renting one in the DC area in recent years, plummeting rental prices in the region now mean that it's a better deal to rent than to buy.
A report by Roofstock calculates that the rent-to-price ratio in the DC area as 5.15%, lower than the nationwide average of 6.26%. The rent-to-price ratio is the median annual rent as a percentage of the median home price for the same property; the lower the number, the better a deal it is to rent than to buy.
The report's conclusions reinforce other data showing that the DC area leads the nation in rental concessions offered, and that rents in DC have dropped by double digits this year as home prices hit record highs.
The DC area has the 38th-lowest rent-to-price ratio out of the largest 53 metro areas. Based on data culled from the Department of Housing and Urban Development, the U.S. Census Bureau, and Zillow, the median monthly rent in the DC area is $1,974, while the monthly mortgage payment for a median-priced home ($459,656) is $1,495.
The report calculates the monthly mortgage payment based on a 30-year, fixed-rate mortgage with a 20% down payment and a 2.72% interest rate.
Thumbnail photo by Ted Eytan.
This article originally published at https://dc.urbanturf.com/articles/blog/its-cheaper-to-rent-than-to-buy-in-dc/17648.
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