Rent Or Buy? Mortgages More Affordable Than Rent in Some Parts of D.C.

Mortgage rates are at historical lows, but in a market like Washington, D.C., sometimes renting can prove a better option for residents. 

Shannon Page is building her first home in D.C. After years of renting in the market, she and her family decided to go for it.

"Rent is so high in D.C. Believe it or not, we get a lot more space and pay less money than we would paying rent," Page said. 

But the American dream of purchasing a home may soon become an anomoly. 

A report by the Urban Institute shows home ownership rates in the U.S. falling through 2030, and that means more renters - lots of renters.

RealtyTrac, a company that collects U.S. real estate data, says you should not spend more than 20 percent of your income on housing.

For example, if you live in Arlington County, purchasing a home would eat up 36 percent of your annual income. That number soars to 50 percent in the District. Which is why in both areas, RealtyTrac recommends renting. 

But if you go to Prince William or Prince George's counties, where it takes just slightly more than 20 percent of your annual income to buy a home, RealtyTrac recommends buying.

State County Gross Avg. Weekly
Wage, Q3 2014
% of Income
That Would Go to Mortgage
Rent or Buy?
 VA    Fairfax  $1,447  29%  Rent
 MD  Montgomery  $818  28%  Rent
 MD  Pr. George's  $1,033  21%  Buy
 DC  DC  $1,631  50%  Rent
 VA  Pr. William  $845  22%  Buy
 VA  Loudoun  $1,105  29%  Rent
 MD  Frederick  $905  21%  Buy
 VA  Arlington  $1,545  36%  Rent
 MD  Charles  $828  17%  Buy
 VA  Alexandria  $1,345  39%  Rent
 VA  Stafford  $924  19%  Buy
 VA  Spotsylvania  $707  19%  Buy

However, some experts say current low mortgage rates may be reason enough to take a hard look at your finances. 

"A 30-year fixed rate mortgage rate is slightly above 4 percent. I'm old enough to remember when my wife and I bought our first home her in the D.C. area. They were double digit morgage rates," said Bankrate's Mark Hamrick. 

Hamrick says depending on the economy and "The Fed," interest rates will likely climb slightly by September.

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