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54 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Potential Homebuyers Consider Renting vs. Owning New research from LendingTree reveals the U.S. cities where a mortgage is almost as affordable as renting. R enting is the less-ex- pensive option for most Americans. Location is likely to be a determining factor when deciding whether to sign a lease or a mortgage. That's because cost is one of the biggest considerations, and that varies among cities. So the researchers at LendingTree, using U.S. Census data, compared the price of renting versus buying in 50 major metropolitan areas. Taking what the team found into consideration, analyst Jacob Channel offers suggestions about spotting a potential homebuyer versus someone for whom renting might be the better option. For any homeowner still paying off a mortgage, renting is likely cheaper than owning in each of the nation's 50 largest metros. On average, the difference between median gross rent and me- dian housing-related costs for homes with a mortgage is $564 a month. Channel notes that this is lower nationwide than in 2019, when renters paid some $593 less monthly. "A combination of factors, including record-low interest rates that offset rising home prices, likely contribute to this smaller gap," he notes. In San Jose, California; New York; and San Francisco, the me- dian monthly rent is about $1,262 less than the median monthly costs for a homeowner. That is the widest cost gap the researchers found, and unlike most of the cities examined, the gap in those areas has widened since 2019, when the difference was $1,221. The narrowest expense gap was found in Orlando, Florida; Phoenix; and Jacksonville, Florida. In those cities, it is still about $262 per month less to rent than to own, all housing costs considered, on average. In a circumstance where the homebuyer does not have a cur- rent mortgage—say they have paid off the home, paid cash for the home, or are not a previ- ous homeowner—San Jose, San Francisco, and San Diego show the widest gap, and Milwaukee, Cleveland, and Buffalo show the narrowest. The article on LendingTree.com breaks down the full ranking. The LendingTree author points out that renting might be the better option for someone who doesn't plan on staying in one area for a long time or is looking for short-term savings. He adds, "On the other hand, buying a home can be a valuable investment that turns out to be cheaper in the long term." Elizabeth Bowie Christoforetti, of the Harvard Graduate School of Design, said both papers show that "digital transformation in housing design and construction is a complex, but not insurmount- able, socio-technical challenge." A study by the National Association of Homebuilders (NAHB), published by Builder Online, said lumber's price volatil- ity has caused the average price of new single-family homes to rise. While prices have settled from their highs in the spring of 2021, when softwood lumber prices added approximately $36,000 to the price of an average new single- family home, softwood lumber prices are still contributing to price appreciation in both the single- family and multifamily sectors, according to the NAHB. Could Offsite Construction Lower Home Costs? Two studies claim artificial intelligence and machine learning are a step in the right direction but not the absolute answer to cutting costs in home construction. A nalysis by the Joint Center for Housing Studies (JCHS) from Harvard Univer- sity states digitalization cannot change the "long-discussed but not-yet realized" promise that offsite construction will reduce the cost of home building or improve its quality. Instead, increased use of digital tools will only occur when entities adopt "platform thinking," accord- ing to the study's authors, Ivan Rupnik (Northeastern University), Ryan E. Smith (University of Arizona), and Tyler Schmetterer (MOD X LLC). They describe platform thinking as systems that use the modules to take advantage of the economies of scale associated with standard- ization but are flexible enough to respond to customers' needs and preferences. JCHS' piece says this approach has allowed other industries to increase productivity and is also being used by offsite construction forms outside the U.S., including Japan and Sweden. "The international examples also underscore the importance of cre- ating industry-wide standards for modular and offsite construction," the study states. An additional study, "Artificial Intelligence for All: Perspectives and Outlooks on the Role of Machine Learning in Architectural Design," notes developments in artificial intelligence and machine learning could speed up how housing is not only designed and built, but also reduce production costs. "In particular, AI and ML make it possible to iterate design approaches more quickly, which, in turn, should reduce the time it takes to develop final plans for projects," the study claims.