Say what?! Places where it’s easier to qualify for a mortgage than a leaseby Punctual Abstract
Yes, you read that correctly. In some markets, one needs a higher FICO credit score to rent than to buy a home, according to the resident screening service RentGrow. On a nationwide basis, the average credit score required to rent an apartment for all building types (high-end, midlevel, and low-end) was 650. For all building types, those with a score of 538 and below were generally rejected.
Average Required Credit Score to Rent
This “Twilight Zone” situation is especially true in the country’s hottest rental markets — Seattle, Boston, and San Francisco — all of which require, on average, a credit scored over 700 to rent. As you’ll see, the average credit scores required to rent in these markets are actually below the 580 required to qualify for a mortgage loan from the Federal Housing Administration.
– Seattle – 711
– Boston – 737
– San Francisco – 724
Why does it matter?
This strange situation highlights one obvious point: rent prices are soaring. It also beautifully illustrates something we all already know to be true: buying a home is a better investment than renting. According to a study in Trulia, it is buying is 23% cheaper than renting nationally. In 98 of the country’s top 100 housing markets, buying is cheaper than renting.
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