Looking to buy or rent a home? You might want to consider staying in (or moving to) St. Louis. In a report today released by real-estate site Zillow, researchers found that the St. Louis metro area was one of the most affordable metro areas in the country, especially for renters.
Nationally, the analysis of U.S. rental and mortgage affordability shows that U.S. renters spend about 30 percent of their income on rent, while homebuyers spend about 15 percent of their monthly incomes on mortgage payments.
In St. Louis, renters can expect to pay 24 percent of their income towards rent (6 percent less than the national average), which is the lowest rate among the 35 metro areas in the U.S. that were included in the report. St. Louis homeowners put 10.8 percent of their income towards mortgage payments, which was the second-lowest rate in the country, tied with Indianapolis and Pittsburgh.
February’s home values were also up 3.7 percent year-over-year in the St. Louis metro to $132,500, and rents rose 4.3 percent to a Zillow Rent Index of $1,141.
Overall, affordability was lowest in cities that have fallen behind in available properties to keep up with population growth, a common supply-and-demand issue that raises home prices.
San Francisco, a city with large population growth, was named the least affordable housing market. The Zillow analysis showed that for every 1,000 new residents, there were just 193 new housing units permitted. On average, San Francisco metro resident spent a staggering 44 percent of their income on rent and 39.2 percent of their income on a monthly mortgage payment.
Zillow also stated that over the past several years, renting has become increasingly less affordable, and, due to recovering home prices and historically low mortgage rates, owning a home has become more affordable on a monthly basis.
“As the economy continues to improve, more Americans are slowly moving off of their buddies’ couches and out of their parents’ basements into homes of their own, first likely as renters and then eventually as homebuyers,” said Zillow chief economist Dr. Stan Humphries.
