Report: Median Mortgage Payments Equal to Median Rents

by Mark Wellborn

Over the past two years, UrbanTurf has re-visited the rent versus buy question from time to time, a debate that has bred a number of calculators, but ultimately a decision that is based on more than just punching numbers into a custom tool.

With the caveat that the decision to buy a home is a very personal one and that these calculators should just be used as a guide in that process, some interesting news came out earlier this week that will re-ignite the debate.

Report: Median Mortgage Payments Equal to Median Rents: Figure 1
Capital Economics

The New York Times blog Economix reported via Capital Economics (subsc. required) that, for the first time in three decades, the median monthly rental payment in the U.S. is almost the same as the median mortgage payment.

However, it is important to note that neither closing costs or down payment are factored into the equation. Furthermore, many who might want to take advantage of the mortgage-rent payment equality simply can’t.

From Capital Economics:

Even if some households want to buy, widespread negative equity and tighter credit conditions mean many can’t qualify for a mortgage. For example, lenders now require a credit score of above 700, compared with 650 previously, which has essentially shut 13 million households out of the mortgage market.

This article originally published at http://dc.urbanturf.com/articles/blog/report_median_mortgage_payments_equal_to_median_rents/4352


  1. DCOwner said at 6:19 pm on Friday October 14, 2011:
    While you pointed out that closing costs and down payment are not factored into the equation, also note that tax advantages of home ownership are also most likely not factored into the equation.
  1. Rob said at 7:46 pm on Friday October 14, 2011:
    The big problem with this statistic is that the median rental property isn't the same as the median owner-occupied property. And, much more importantly, the difference between them hasn't stayed constant (or even close to constant) over time.
  1. xmal said at 5:14 pm on Sunday October 16, 2011:
    The above commenters make good points. I would also like to add inflation: rent will keep constant while mortgage payments decrease in inflation-adjusted dollars. Does the original source also break this down by city? That could be enlightening, much like the Rent-vs-Buy Report on Trulia: http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/

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