Is it better to rent or buy in Whatcom? New report weighs in on regional differences
Housing is growing increasingly expensive for middle-income Americans, but renting is now better than buying for most people, according to a new report from ATTOM, which compiles nationwide real estate data.
ATTOM’s annual report, released Thursday, Jan. 18, showed that:
▪ Rents are growing faster than wages for almost three-quarters of Americans.
▪ Home prices are rising faster than wages in more than 90 percent of the nation.
“Last year our study concluded that it was more affordable to own than to rent in 60 percent of the markets analyzed,” said Rick Sharga, ATTOM’s executive vice president of market intelligence.
“But with mortgage rates doubling, monthly payments for new homeowners rose by 45 to 50 percent compared to a year ago, even though home price appreciation has slowed down dramatically. This has made renting more affordable in the majority of markets, despite rental rates continuing to rise over the past year,” Sharga said in a statement.
Because of the Federal Reserve’s ongoing efforts to curb inflation, rates on a 30-year fixed mortgage have risen to about 6% this month from 2.6% in January 2021.
ATTOM’s report did not single out Bellingham or Whatcom County, but recent Bellingham Herald reporting shows that:
▪ Monthly rent on the average Bellingham apartment rose from $700 in January 2015 to $1,350 in January 2023, according to Zumper.
▪ Average rent for a one-bedroom apartment in Bellingham was $1,260, and $1,825 for a two-bedroom apartment, according to a December report from Zumper.
▪ Median home value in Bellingham was $723,433 in November. That figure was $550,000 for all of Whatcom County, according to Zillow.
▪ Nearly 40% of Washington households are renters, and average rent in Washington state increased 65% from 2010 to 2021, the Washington Low Income Housing Alliance said, citing U.S. census data.
▪ Full-time workers in Washington must earn $31.33 per hour to be able to afford a “modest” two-bedroom apartment at fair market rent, according to the 2022 “Out of Reach” report from the National Low Income Housing Coalition and the Washington Low Income Housing Alliance.
▪ A statewide analysis conducted by United Way in 2020 showed that 10% of Washington residents earn incomes that are below the federal poverty line and another 23% are classified as working poor and their numbers have been increasing.
Additional data from the ATTOM report shows that:
▪ Cities in the South and Midwest are the most affordable.
▪ Cities in the West and Northeast are the least affordable.
▪ Rents are rising faster than home prices in almost half the U.S., but renting is more manageable.
For its report, ATTOM examined single-family home price data from January-November 2022 and average rental data for three-bedroom rentals for 2023.
▪ Rental affordability represents the average fair market rent for a three-bedroom property as a percentage of the average monthly wage.
▪ Home-buying affordability represents the monthly house payment for a single-family median-priced home, including mortgage, property tax and insurance.
