The U.S. homeownership rate has slowly fallen in recent years to currently its lowest level since 1965, but new research from the National Association of REALTORS® reveals that there are a number of affordable metro areas with above-average hiring and a large segment of current renters who earn enough income to qualify to buy a home and Columbus OH ranks in the Top 10.
NAR reviewed employment growth, household income and qualifying income levels in nearly 100 of the largest metropolitan statistical areas across the country to determine which areas with employment gains above the recent national average also have the largest share of renters who can currently afford to buy a home. Of the Top 10 metro areas with the highest share of renters who earn enough to buy, nine were either in the South or Midwest – including three cities in Ohio.
Lawrence Yun, NAR chief economist, says there’s been a significant increase in renter households since the Great Recession which include both young adults and those who lost their home – and especially in metro areas that have seen robust job creation and a resulting influx of new residents. This has led to a multi-year run-up in rents in several markets that have contributed to many of these renters’ inability to advance into homeownership.
“Even in a time of expanding home sales, steady job growth and historically low mortgage rates, the homeownership rate recently tumbled to its lowest level in over five decades as many renters struggle to juggle escalating rents without commensurate income gains,” he says. “However, this new study reveals that there are several affordable, middle-tier markets with solid job gains and a large segment of renters who earn enough to buy a home.”
The top 10 metro areas highlighted in NAR’s study were all outside of the West Coast and each had a share of renters who qualify to buy that was well above the national level (28 percent).
The top markets with the highest share of renters who can afford to purchase a home are:
- Toledo, Ohio (46 percent)
- Little Rock, Ark. (46 percent)
- Dayton, Ohio (44 percent)
- Lakeland, Fla. (41 percent)
- Louis, Mo. (41 percent)
- Columbia, S.C. (41 percent)
- Atlanta (40 percent)
- Columbus, Ohio (38 percent)
- Tampa, Fla. (38 percent)
- Ogden, Utah (38 percent)
According to Yun, it’s no surprise that many of the markets with the most renters qualified to buy are in the Midwest and South. The median existing-home sales price in these two regions continue to be lower than the Northeast and West, and while many of these areas were slower to recover from the recession, improvements in their local labor markets in the past year have pushed their hiring levels to at or above the national average growth rate.
“Overall housing affordability and local job market strength play a pivotal role in a renter’s decision on whether to buy a home or sign another lease” – rent versus buy decision, adds Yun. “The good news is that other recent NAR survey data shows that those residing in the two regions were the most likely to say that now is a good time to purchase a home.”
Concludes Yun, “With mortgage rates now at their all-time low, these identified markets are well-suited for the many renters financially capable and interested in taking advantage of the stability and wealth-building benefits owning a home can provide.”
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
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