Soaring mortgage rates hit U.S. cities: Here’s where buying a home is most expensive relative to renting
The average interest rate on a 30-year fixed mortgage, at around 7.5%, is almost three times as high as it was in December 2020, and a construction shortfall in the U.S. has eroded the supply of single-family homes. As a result, the cost of buying a home relative to renting has reached unprecedented highs.
Nationwide, the average new-home mortgage payment is now 52% higher than the average monthly rent. And for many buyers, even that figure is misleadingly low, since it reflects lower prices in rural areas and small towns. In the major metro areas where business is concentrated, the premium attached to buying is far higher. In this graphic, the taller a city’s name, the higher the relative cost of ownership: It’s an apt metaphor for an investment that’s a bigger stretch than ever.
View this interactive chart on Fortune.com
This article appears in the December 2023/January 2024 issue of Fortune with the headline, “A high-rise hurdle for homebuyers.”
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