Prospective homebuyers believe renting could be detrimental to future: Report
Bank of America Head of Consumer Lending Matt Vernon discusses the real estate market and rent prices.
Rent prices continue to surge in some markets. However, affordable options still exist in certain parts of the country, with some units going for under $1,000, according to a recent report from Zillow.
In Zillow's recent analysis, published Thursday, apartments under $1,000 a month, while scarce, are easier to find in parts of the South and Midwest. Thirteen metros have more than one-third of apartments renting for less than $1,000 per month.
However, that's out of 100 metros, equating to about 13% of the metros tracked by Zillow for the report.
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It's a bright spot for homeowners who have been sidelined from the market due to persisting affordability issues. Although housing price growth has cooled since its surge during the early days of the pandemic, mortgage costs are still more than double what they were in 2019. Rent on a typical apartment is also up nearly 40% during that same period, underscoring the pressure both renters and homeowners are facing.
A shot of a neighborhood in Wichita, Kansas during the spring time. (Getty Images / Getty Images)
Today's renters would need to set aside 5% of their income for almost nine years just to afford a 10% down payment on a typical home, which is up from 7.4% since 2019.
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"It's no secret that rents and home prices have sprinted ahead of incomes. For many renters, that makes saving for a down payment feel out of reach," Zillow Senior Economist Kara Ng said in a statement. Ng explained that moving to a more affordable area can really boost someone's long-term financial health, and help them save for a future home.
A typical residential street in McAllen, Texas. (Getty Images / Getty Images)
Wichita, Kansas, had the highest share of apartment listings with monthly rent under $1,000. About 54% of the apartments in the area were priced below the $1,000 mark. McAllen, Texas, came in at a close second with just over follows at just over 50% of apartments being listed for under $1,000 per month.
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A drone shot of Little Rock, Arkansas. (Getty Images / Getty Images)
Here are the top five metros with the most apartments under $1,000 per month:
1. Wichita, Kansas : 54%
2. McAllen, Texas : Just over 50%
3. Little Rock, Arkansas: 49%
4. Toledo, Ohio: 46%
5. Oklahoma City, Oklahoma: 42%
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Comparatively, these low-cost options are far and few between in areas such as Boston, Miami, Washington, D.C., North Port, Florida, Charleston, South Carolina, and Cape Coral and Florida.
All the aforementioned metros have fewer than 1.8% of listings renting for less than $1,000, according to the Zillow report.
