After the COVID-19 pandemic rattled the housing market, researchers have found that homeowners in the Burlington metro area now pay significantly less per month than renters.
A new report from Stessa, a real estate financial management company, found that homeowners in Alamance County pay, on average, 22.4% less than renters each month.
“When the COVID-19 pandemic hit America and sent people fleeing from small apartments in the biggest cities, it immediately propelled rent and home prices in opposite directions. However, despite quickly escalating home prices, there are still many places across the country where the typical monthly mortgage payment is on par or below market rent, offering opportunities for both prospective home buyers and real estate investors,” a press release from Stessa said.
Using data from Zillow, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, Stessa researchers compared the average cost of rent with the average cost of homeownership including a mortgage payment and property taxes. In the report, median rent price and the mortgage and tax on a median-priced home for each metro are compared.
According to the report, homeowners in the Burlington metro area, which covers all of Alamance County, pay an average of $776 in mortgage and tax payments each month for a $191,707 median-priced home. In comparison, renters pay an average of $1,000, or 22.4% more.
This is a much larger difference between homeownership and renting costs compared to the statewide averages. Across North Carolina, renters pay about $1,125 per month compared to homeowners paying an average of $980 on a $243,319 median-priced home. That’s a 12.9% decrease in cost for homeowners.
“Just before the start of 2020, home and rent prices were growing at the same rate —3.7% year-over-year. Within months, however, rental costs experienced an uncharacteristic cooling off that slowed growth to less than 2% annually by April 2021. Meanwhile, the effects of the pandemic nearly quadrupled the growth rate of home prices, catapulting it to 14.6% by April 2021. Still, record-low mortgage rates have dramatically pushed down the monthly costs associated with homeownership,” the researchers explained.
Mortgage rates hit an all-time low of 2.65% at the start of 2021, making homeownership more affordable for many.
Researchers found that other small metro areas in North Carolina are also more favorable to homeowners. Average monthly costs in these areas are:
- Rocky Mount: $958 for renters, $542 for homeowners
- New Bern: $1,144 for renters, $695 for homeowners
- Goldsboro: $1,007 for renters, $620 for homeowners
- Jacksonville: $1,198 for renters, $747 for homeowners
- Greenville: $1,054 for renters, $671 for homeowners
Larger and midsize metros in the state also saw similar trends, though the larger the city, the smaller the cost difference is in many cases. Average monthly costs in these areas are:
- Raleigh: $1,399 for renters, $1,343 for homeowners
- Charlotte: $1,304 for renters, $1,159 for homeowners
- Fayetteville: $1,096 for renters, $651 for homeowners
- Winston-Salem: $924 for renters, $758 for homeowners
- Greensboro: $975 for renters, $772 for homeowners
- Asheville: $1,403 for renters, $1,246 for homeowners
- Hickory: $778 for renters, $696 for homeowners
The only North Carolina city to make the list where homeownership costs were higher than median rent was Durham. In that metro area, renters pay an average of $1,234 compared to an average cost of $1,317 for homeowners (6.7% more).
To view the full report, including data on other metro areas outside North Carolina, visit stessa.com/blog/cities-cheaper-buy-vs-rent.
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Elizabeth Pattman is the trending topics reporter for the Times-News in Burlington, covering business, COVID-19 and all things trending. Contact Elizabeth (she/her) at epattman@gannett.com. I'm also available on social media @EPattmanTN on Twitter or @burlingtontimesnews on Instagram.
This article originally appeared on Times-News: Report: Homeownerships costs lower than renting in Burlington metro area
