Increased Renting Cost Outpaces Cost Of Purchasing A Home

Monthly rent costs are up by a whopping 21% year-over-year, however, that doesn't mean purchasing a home is going to be any less difficult as inflation affects both sides of the equation, according to the latest report from Redfin. 

According to Redfin, the national median monthly mortgage payment for homebuyers climbed at about the same annual rate—20%—but rose just 1% from Oct. Rapidly increasing housing costs are a big contributor to overall inflation, which hit 6.8% in Nov., its highest level since 1982.

“First inflation came for the for-sale housing market, and now it is coming for the rental market,” said Redfin chief economist Daryl Fairweather. “Many people have been priced out of the for-sale market and are looking to rent instead, but that demand is pushing up rents. Anyone who bought a home before this year can pat themselves on the back because their mortgage payments are fixed, meaning their biggest recurring expense is immune to inflation. If you are looking to buy or rent now, there's nowhere to hide from inflation when it comes to housing costs. The good news is that the tight labor market means it's a great time to move somewhere more affordable. Chances are good that no matter where you go, you'll be able to find a new job relatively quickly.”

The report also stated that rent-price increases outpaced mortgage payment increases for new homebuyers in 19 of the 50 largest metro areas in the U.S. during Nov.