Welcome to 2017, when many of the places your clients want to live will be out of reach.

“In not every market, but many, the option of whether to rent or buy is like picking your poison,” says Daren Blomquist, senior vice president of RealtyTrac, now renamed ATTOM Data Solutions to reflect its coverage of more business channels. “Either [choice] is pretty unaffordable in high-priced markets,” a category that is expanding.

Attom, creator of the nation's largest fused property database, recently released its 2017 Rental Affordability Report showing that buying a median-priced home is more affordable than renting in 66 percent of housing markets in the U.S., although that could change if mortgage rates keep rising.

The new data is depressing for both ends of the age wave, with baby boomers largely priced out of coastal communities and millennials off historic norms for home ownership by 11 percent compared with previous generations, says Blomquist. And with mortgage interest rates already up 75 basis points from last month, the country's largest generation of first-time home buyers risks missing what has been a golden opportunity to buy.

If the researchers had used the current Freddie Mac mortgage rate of 4.32 percent, up from 3.47 percent, the percentage of affordable housing markets would drop from 66 to only 55 percent. Home ownership has also declined from its peak of 69.2 percent in 2004, and hasn't moved above 63.5 percent since 2007. That fall in the home ownership market translates to more than 15 million people, about 9 million of them millennials, Blomquist notes. There is a sentiment among millennials and Gen Xers that the “shift away from ownership is a laudable goal,” he says, which could be rooted in the wholesale foreclosures of the financial crisis. However, if the two generations haven't jumped on home ownership by now, “they're missing out on a big window of opportunity.”  

The other deterrent for those generations, many of whom are straddled with hefty student loans, is the percentage of average wages needed to rent or buy. The higher-priced markets require on average 39 percent of wages to rent and 37 percent to buy, Attom found. Buyers and renters are having to stretch. “Typically you want to spend 30 percent or less on housing,” says Blomquist. Kings County, New York, which is New York City's borough of Brooklyn and where it's more affordable to rent, will take an average bite of 64.3 percent out of renters' pockets in 2017, he says. Attom used fair market rental rates calculated on three-bedroom houses and apartments by the Department of Housing and Urban Development (HUD).

By contrast baby boomers, aged 52 through 70, living in Phoenix paid just 32.2 percent of their wages to buy in 2016 versus 39.4 percent to rent comparable spaces. Those who can use the proceeds from their current home to buy inland, in Phoenix and parts of Florida, Texas, California  or North Carolina, for example, may be well positioned since rising mortgage rates are expected to constrain housing prices. But this could also change if wages rise or banks and government agencies again devise products to make loans more accessible to a wider pool of buyers.