The average interest rate on a 30-year fixed mortgage, at around 7.5%, is almost three times higher than it was in December 2020, and a U.S. construction deficit has eroded the supply of single-family homes. As a result, the cost of buying a home versus renting has reached unprecedented heights.
Nationally, the average mortgage payment for a new home is now 52% higher than the average monthly rent. And for many buyers, even that number is deceptively low, because it reflects lower prices in rural areas and small towns. In large metropolitan areas where activities are concentrated, the premium attached to the purchase is much higher. In this chart, the higher the name of a city, the higher the relative cost of ownership: it’s an apt metaphor for an investment that represents a larger scale than ever before.
Check out this interactive chart on Fortune.com
This article appears in the December 2023/January 2024 issue of Fortune with the headline “A High Obstacle for Home Buyers.”
This story was originally featured on Fortune.com
