A shift in Forsyth County’s housing market in 2018 has made it more affordable for people to rent than to buy, according to a report timed for release today by Attom Data Solutions.
However, the cost of either strategy continues to go up in terms of the percentage of household income required, particularly as mortgage rates increase.
Attom calculates the percent of average monthly wages needed to afford a mortgage on a three-bedroom home at the median sales price.
The company said Forsyth homeowners needed to pay 28.5 percent of an average weekly household wage of $928, or about $1,152 a month, to afford the county’s median home price of $160,000.
Historically, the average Forsyth County homeowner has spent 25.5 percent of household wages for the mortgage.
Meanwhile, Attom determined $1,054 was required for a monthly rent-to-own payment for a three-bedroom housing unit. That represented a 26.2 percent requirement of average monthly household wages.
Most real estate agents recommend not dedicating more than one-third of the household income to housing costs.
Affordability for rent-to-own was calculated by dividing the annual fair-market rent for a three-bedroom property in each county by the estimated median household income.
Affordability for buying was calculated by dividing the annualized house payment for an average-priced three-bedroom property, also by the estimated median household income.
An estimated home-payment amount factored in a 3 percent down payment, a 30-year fixed-rate loan with the average interest rate from the Freddie Mac primary mortgage market survey, and related property and mortgage insurance costs and property taxes.
For other metro counties in North Carolina, Attom determined the percent of monthly wages needed for a mortgage based on the median sales price for each market was:
- Davidson County: 24 percent for a $116,000 house, compared with 29.2 percent for a $963 monthly rent. Rating was a buy market.
- Durham County: 31 percent for a $235,000 house, compared with 28.2 percent for a $1,535 monthly rent. Rating was a rent market.
- Guilford County: 29.7 percent for a $163,000 house, compared with 27.9 percent for a $1,225 monthly rent. Rating was a rent market.
- Mecklenburg County: 34 percent for a $232,500 house, compared with 28.6 percent for a $1,491 monthly rent. Rating was a rent market.
- Wake County: 40.3 percent for a $273,000 house, compared with 31.3 percent for a $1,225 monthly rent. Rating was a rent market.
“With rental affordability outpacing home affordability in the majority of U.S. housing markets, and home prices rising faster than rental rates, the American dream of owning a home may be just that — a dream, “said Jennifer von Pohlmann, director of content and public relations at Attom.