(The Center Square) – A strong statistical case for home ownership over renting is made in a new analysis from the Office of State Budget and Management in North Carolina.
From 2020 to 2024, the cost of rent in North Carolina rose 10% over the previous five years, according to the report’s interpretation of newly released U.S. Census numbers.
In contrast, the cost for homeowners with mortgages increased only 0.9% and for those without a mortgage, there was no change.
In every county in the state, at least 25% of renters were considered “cost burdened” meaning they spent more than 35% of their income on housing, the state study found.
“In four counties – Carteret, Hertford, Person and Watauga – the share of cost burdened households exceeded 50%,” the study found. “In another 39 counties at least 40% of renter households were cost burdened.”
Of the latter, Orange County was highest at 48.5%.
The COVID-19 era played a role in the disparity between renters and owners.
“The onset of the COVID-19 pandemic in 2020 dealt a series of shocks to national, state and local housing markets that continue to ripple out in different ways for renters and homeowners,” according to the study by John Quintero, Census Liaison/State Data Center Coordinator.
Emergency measures such as increased unemployment insurance and moratoriums on evictions helped. There was also a shortage of labor during the pandemic which made jobs easier to find.
But when those conditions and programs expired, a sort of economic hangover followed, the report said.
“The end of COVID-era policies, the weakening of the labor market and rising costs have stressed many renter households,” Quintero’s report concludes. “These factors have contributed to the state’s increasing share of cost burdened renters.”
It was a different story for homeowners.
Mortgage rates dropped, allowing homeowners to refinance.
“Remote work also enabled people to move to desirable places like North Carolina,” the state study found. “Housing demand led to a surge in prices that is only starting to recede, according to the Kenan Institute.”
The downside for homeowners has been rising property taxes, homeowner’s insurance, homeowner association fees and utility costs, the report said.
A study last year by the Federal Reserve Bank of Minneapolis concluded that nonmortgage related housing costs went up faster than inflation between 2021 and 2023, accounting for all the changes in housing costs for homeowners with mortgages, the state study said.
