Believe it or not, it's actually more affordable to buy a home than to rent one in the US.
The average 2015 fair market rent in the 25 least affordable markets is $1,686, according to RealtyTrac. That's 38% above the national average for all the counties they analyzed.
RealtyTrac measures affordability by considering median income relative to median rent.
"Fair market rents in these more than 500 counties on average increased 2% in 2015 compared to 2014," said Daren Blomquist, vice president of RealtyTrac in a statement. "In the majority of these counties nationwide, it's still cheaper to buy than it is to rent, albeit by a slight margin. On average, it takes 27% of median income to pay fair market rent on a three-bedroom property. That compares to 25% of median income to buy a medium price property."
Millennials are opting to rent in coastal markets that are affordable, but buy property in markets that are cheaper and further inland, Chris Pollinger of First Team Real Estate noted. “We are still five to seven years from seeing the millennials enter into the housing market in the more affluent coastal areas,” he said.
In the chart below, RealtyTrac ranked the least affordable markets by the percentage of median income that's required to rent.
“First-time homebuyers and potential boomerang homebuyers are stuck between a rock and a hard place in today’s housing market: many of the markets with the jobs and amenities they want have hard-to-afford rents and even harder-to-afford home prices; while the more affordable markets have fewer well-paying jobs and tend to be off the beaten path,” said Blomquist.
“Those emerging markets with the combination of good jobs, good affordability and a growing population of new renters and potential first-time homebuyers represent the best opportunities for buy-and-hold real estate investors to buy low and benefit from rising rents in the years to come.”