While increasing home prices continue to outpace rental growth in most areas across the country, it is more affordable to buy a home than to rent in Baton Rouge, a new report finds.
With a three-bedroom rental rate of $1,243 in Baton Rouge, ATTOM Data Solutions writes in the 2018 Rental Affordability Report that buying a median-priced home in the parish is more cost-efficient for someone making the average weekly wage of $959. The study only takes into account renting a three-bedroom compared to buying a median-priced home, assuming the average weekly wage.
While renting a three-bedroom apartment or home takes up 29.9% of the average person’s wages, buying a $169,900 home takes 26.9%, according to the study.
Buying is also more affordable than renting in three other Louisiana parishes studied—Orleans, Jefferson and Caddo. Renting a three-bedroom in Orleans Parish takes up nearly 34% of the average worker’s income, making it less affordable to rent there than in Baton Rouge.
“Although buying is still more affordable than renting in the majority of U.S. housing markets, that majority is shrinking as home price appreciation continues to outpace rental growth in most areas,” Daren Blomquist, vice president at ATTOM Data Solutions, says in the report.
However, in major population centers, renting is more affordable than buying, and when broken down by population, the study finds 64% of the U.S. population live in markets that are more affordable to rent.
Louisiana’s rental market took a shot to the arm after the 2016 floods, with occupancy rates rising to historic highs and rental rates increasing. However, that trend has turned around recently and the market has stabilized somewhat as flood victims return to their homes and rental properties come back online.
Check out the full report, including an interactive map.
—Sam Karlin
