Millennials fretting over the high costs of buying a first home, fear no more: renting may be the better financial option anyway.
A new report shows the growth of home prices is outpacing that of rents across many major metropolitan areas in the United States, which could be yet another factor decreasing the country’s historically low rate of homeownership.
The Wall Street Journal reported a just released third-quarter housing index that compares housing prices and rents in 23 major cities.
Of all 23, the Journal reported, homes were becoming more expensive faster than rents were rising. Nationwide, the cost of buying a home spiked 5.5 percent year-over-year September, while rents jumped only 3 percent.
That trend doesn’t appear to be headed for a change in the near future, either: developers are about to deliver one of the largest influx of apartments in history— a supply boom that will likely keep rent growth at a moderate rate.
Meanwhile, the rising home costs have showed no sign of stopping, even as brokers call for sellers to moderate their expectations and lower asking prices.
The trend has also brought the nation as a whole closer to the tipping point for being renter friendly.
Cities where buying is still the better option, according to the Journal: Atlanta, Boston, Chicago, Cleveland, Los Angeles, New York and Philadelphia. [Wall Street Journal].