Time to Buy? DC is Sixth Most Expensive Rental Market in the U.S.

• March 26th 2010

by Mark Wellborn

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If you have been debating whether or not to continue to rent or dive in and buy a home, a study released by the Center for Housing Policy might push you in the direction of buying.

The study, entitled Paycheck to Paycheck: Wages and the Cost of Housing in America, ranks DC as the sixth most expensive rental market in the U.S. where the average monthly rate to rent a two-bedroom apartment is about $1,500. San Francisco ranks as the most expensive city in the country to rent with an average monthly rate of $1,760. The rents used in this study are based on the Fair Market Rents for fiscal year 2009 and 2010, issued by the U.S. Department of Housing and Urban Development.

The study also provided some interesting insight into the home buying market in DC. From 2008 to 2009, the annual income needed to buy a home in the area actually fell 5 percent, according to the study, from $89,674 to $85,074. The study attributed this mainly to low interest rates:

Although home prices rose or held steady in more than two-fifths of metro areas studied, the income needed to purchase a home dropped in almost all areas due to lower mortgage interest rates. Between 2008 and 2009, home prices rose or held steady in 90 (43.5 percent) out of 207 metropolitan areas. Over the same time period, the income needed to purchase a median-priced home decreased in 193 metro areas (93.2 percent). A drop in mortgage interest rates reduced monthly mortgage payments (and the income needed to afford them) even in most of the markets in which home prices rose or leveled off.

This article originally published at https://dc.urbanturf.com/articles/blog/time_to_buy_dc_is_sixth_most_expensive_rental_market_in_the_u.s/1918.