If you’re one of the countless aspiring homeowners who have been scrimping and saving for that down payment only to be stymied by skyrocketing demand, you can take comfort in knowing that you’re saving more than you might think — almost no matter where you live.
A CITY analysis of median monthly housing costs shows that across every ZIP code in Monroe County, renters spend less each month on housing than homeowners with a mortgage. How much less? About $450, for a difference of roughly $5,400 a year.
- PHOTO PROVIDED
- Mary Leo, executive director of The Housing Council at Pathstone, noted that not everyone wants to own a house because of the responsibilities and costs.
“Not everyone wants to own a home and have all the maintenance and do the yard work and long-term budgeting to save for a roof and for a furnace and all that other stuff,” said Mary Leo, executive director of The Housing Council at Pathstone, which provides services to homeowners, renters, and landlords in Monroe County and surrounding areas, including a first-time homebuyer course. “Renting is a great and important option.”
The analysis compared median rents — the figures included utilities and other costs — to the median monthly cost of owning a home with a mortgage. In the Rochester metro, median rent was $899, while the median monthly cost of owning a mortgaged home was $1,350, according to the census data.
In the city, the greatest difference between the median rent and the median cost of owning a home with a mortgage was in southeast Rochester, specifically the 14607 ZIP code that covers portions of the Neighborhood of the Arts and Park Avenue, among other neighborhoods, at $747 a month.
The pattern held regardless of how poor or wealthy the ZIP code.
For example, take the 14621 ZIP code that spans northeast Rochester through Clinton and Joseph avenues and 14620, which covers the South Wedge and Highland Park areas.
The median household income was $27,675 in 14621, and $45,885 in 14620. The median home value in the former was $58,300, and $151,100 in the latter.
Yet in both places, the data suggests renting is cheaper. In 14621, the median rent was $810 while the median monthly cost of owning a home with a mortgage was $895, a difference of about $1,020 a year. In 14620, the median rent was $927, which is $5,256 cheaper per year than the $1,365 median monthly cost of a home with a mortgage.
The annual savings fell in favor of renting in the suburbs, too.
In Pittsford’s 14534 ZIP code, the median rent was $1,708 and the monthly cost of owning a mortgaged home was $2,151. In the village of Churchville, the median rent of $923 was $5,676 a year cheaper than the $1,396 the median monthly cost of owning a house with a mortgage.
WHY BOTHER BUYING?
It may be tempting for renters reading these statistics to wipe the thought of buying a home out of their minds for now, or maybe forever.
After all, owning a home is not for everyone. Some people don’t want to be tied down. Others have trouble saving for a down payment. Empty-nesters may not want to deal with the expenses of maintaining a home. Younger people may want to live in an area where housing stock for sale is hard to come by, such as the heart of downtown Rochester.
For many people, owning a home is part of the American dream. When people buy houses, they have assets that typically appreciate in value over time and can be passed down to loved ones.
Home ownership also comes with tax benefits, a peace of mind knowing your landlord won’t change their mind about your living situation, and, for many, a sense of pride.
That’s conventional wisdom and the reason why everyone from your parents to government leaders have extolled the virtues of home ownership.
- PHOTO PROVIDED
- Lanie Bittner, president of the Greater Rochester Association of Realtors, said that buying a house is a way to build equity and wealth.
Then there are the monthly savings that come with having paid off the mortgage, when the median costs of renters versus owners flip across the board and, with few exceptions, land squarely in favor of owners.
Consider Pittsford, for instance, where renters saved $443 more a month on average in housing costs than owners with a mortgage. When that mortgage is paid, the data shows that owners save on average $774 a month more than renters.
In Rochester’s 14621 ZIP code, where renting was $85 cheaper a month than owning a home with a mortgage, owning a home outright yielded almost $400 in savings over the cost of renting, according to the data.
The only place in the immediate Rochester area where monthly housing costs for renters and homeowners without a mortgage was even close, according to the data, was in Honeoye Falls.
There, monthly housing costs for homeowners without a mortgage was $942, which was $37 less than the median rent of $979. At the same time, the median home value of $253,600 was the second highest among area ZIP codes, trailing only Pittsford.
NOT A COMPLETE PICTURE
What the census data does not reflect is how renters in and around Rochester are increasingly finding themselves in a position similar to would-be homebuyers who are priced out of the market.
That is to say that rents are rising in conjunction with home prices, and those increases are not evident in the data, which was taken from the 2019 American Community Survey, the most recent data available.
Last month, Apartment List, a rental listing website that tracks rents in various metros, released an analysis that showed Rochester rents rose just shy of 15 percent between June 2020, when it estimated median rent was $972, and June 2021,with estimated median rent of $1,138. For context, census data showed that median rent in the Rochester metro rose 12.4 percent between 2014 and 2019, to $899 from $800.
The metro’s rising rents are linked to the area’s rising home prices, which have been steadily climbing for the past five years, but shot up sharply during the past year.
The average home in Monroe County sold for $195,975 as of June, according to the real estate site Zillow, an increase of 18.5 percent from a year ago. According to the Greater Rochester Association of Realtors, the median sales price in the region, which extends beyond Monroe County, was 14.4-percent higher in the first quarter of 2021 than a year earlier.
How does that growth look in practical terms?
Take a duplex on Lansdale Street in the city’s Swillburg neighborhood that sold in July for $277,000. Three years ago, the same house fetched $182,500. In the Browncroft neighborhood, a house on Yarmouth Road that sold for $335,000 in 2015 went for $495,000 in June, an almost 48 percent increase.
The same is happening in the suburbs. A house on Heritage Drive in Greece that sold for $108,000 in 2012 sold for $205,000 in July. In Hilton, a house on Peck Road that sold for $127,00 in 2020 brought in $220,000 recently.
In New York, a home’s assessed value is by law supposed to reflect its approximate market value. When homes sell above their assessed value, the value of nearby properties tends to go up, too. That usually means homeowners will pay more in property taxes, and if they’re landlords they may pass those additional costs on to tenants.
“We’ve seen certainly both rents and home prices go up recently, which may not be great for people who are getting into those markets to rent or to purchase, but I personally believe it’s good for Rochester” because people’s properties are gaining value, Bittner said.
Bittner added that even though the seller’s market has driven up home prices in Monroe County, house prices here remain below the national average, which the St. Louis Federal Reserve Bank pegged at roughly $400,000 in the first quarter of 2021.
Leo, of the Greater Rochester Association of Realtors, said that looking forward, the region needs to think about the overall inventory of affordable units for both renters and homeowners.
“We have some long-term planning to do in terms of making sure that we have enough affordable, quality housing at all income levels,” Leo said.
Jeremy Moule is CITY's news editor. He can be reached at firstname.lastname@example.org.