The difference between median rent and the monthly mortgage payment on a median-priced home has shrunk from $777 a month to $221 in the past three years, according to an Associated Press analysis of 45 metro areas.
In areas like Cleveland, Atlanta, Indianapolis and St. Louis, the gap was less than $100 a month, AP reported.
The analysis, which relied on prices during the first quarter of the year, was conducted for AP by Marcus & Millichap Real Estate Investment Services.
With home prices expected to fall faster than rents this year, the difference between monthly rent and a mortgage payment should get even smaller, AP said in reporting on the analysis.
Falling home prices, low interest rates and tax incentives mean that for many debating whether to buy or rent, "the scales are tipping toward homeownership," AP said.
According to the National Association of Realtors, the median price of an existing single-family home fell from $221,900 in 2006 to $169,000 in the first quarter of 2009.
With mortgage rates in the low 5 percent range, monthly principal and interest payments would have amounted to $739, meaning a family earning $35,472 could have qualified to buy the median-priced home, according to a NAR analysis.
In 2006, by comparison, a family needed $54,288 in income in order to qualify to purchase a home at the median price and make monthly payments of $1,131.
Obstacles to renters becoming homeowners include poor credit history and coming up with the money for a down payment. Some workers in education, retail and transportation can’t afford to rent or buy a home in many major cities, AP said, citing a study by the Center for Housing Policy.
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