Top 10 Cities to Buy vs Rent / Rent vs Buy

Today Trulia announced America’s Top 10 Cities to Buy vs. Rent and the Top 10 Cities to Rent vs Buy. Trulia calculated the price-to-rent ratio using the average list price compared with average rent on 2 bedroom apartments, condos and townhomes listed on Trulia.com. To create the list, Trulia analyzed the largest 50 cities in America, by population.

Top 10 Cities to Buy vs. Rent

1. Minneapolis, Minnesota 8
2. Arlington, Texas 8
3. Miami, Florida 8
4. Fresno, California 8
5. San Antonio, Texas 8
6. Mesa, Arizona 9
7. Jacksonville, Florida 9
8. Phoenix, Arizona 10
9. El Paso, Texas 10
10. Las Vegas, Nevada 11

“At the peak of the real estate bubble, cities like Miami, Phoenix and Las Vegas were not affordable for many. Now the opposite is true,” said Pete Flint, co-founder and CEO of Trulia. “Home sellers in these hard hit areas are forced to lower their prices to compete with all the foreclosures on the market. As a result , these unattainable markets are so affordable it makes better financial sense to buy than rent.”

Top 10 Cities to Rent vs. Buy

1. New York, New York 33
2. Omaha, Nebraska 26
3. Seattle, Washington 25
4. Portland, Oregon 22
5. San Francisco, California 22
6. Oklahoma City, Oklahoma 21
7. Kansas City, Missouri 20
8. San Diego, California 20
9. Cleveland, Ohio 20
10. Dallas, Texas 19

“It is not a surprise to see cities like New York and San Francisco on the ‘Rent’ cities but I was surprised to see areas like Omaha, Oklahoma City and Kansas City on our rental list, “said Flint “We’re not suggesting that it’s unwise to buy in these areas, though - just that it’s significantly more expensive than renting. In many of these cities, even though home buying is much more costly than renting, prices are still much lower than they have been in a long, long time.”

Top 50 City Rent v Buy Index
Comparing 2 bedroom Apts/Condos/Townhouses

City State Average   Listing Price/Rent/Price-to-Rent Ratio
Minneapolis MN         $ 153,844    $ 1,700       8
Arlington TX               $ 72,422      $ 789          8
Miami FL                    $ 189,566    $ 2,019       8
Fresno, CA                 $ 90,446      $ 936          8
San Antonio TX          $ 89,068      $ 884          8
Mesa AZ                    $ 71,317      $ 697          9
Jacksonville FL           $ 92,488      $ 870          9
Phoenix AZ                $ 100,535     $ 883          9
El Paso TX                 $ 95,388       $ 770        10
Las Vegas NV           $ 128,815     $ 983         11
Detroit MI                  $ 151,726     $ 1,128     11
Houston TX               $ 164,487     $ 1,163      12
Baltimore MD            $ 187,998     $ 1,300      12
Tucson AZ                 $ 129,800     $ 879         12
Long Beach CA         $ 260,449     $ 1,746      12
Austin TX                  $ 165,326     $ 1,101      13
Virginia Beach VA     $ 178,522     $ 1,093      14
Sacramento CA         $ 152,696     $ 934         14
Washington DC         $ 469,150     $ 2,773      14
Oakland CA              $ 278,245     $ 1,625      14
Albuquerque NM      $ 137,110     $ 792         14
Raleigh NC               $ 146,010     $ 840         14
San Jose CA             $ 298,621     $ 1,691     15
Chicago IL                $ 303,085     $ 1,697     15
Charlotte NC            $ 168,620     $ 929        15
Colorado Springs CO $ 144,074   $ 773        16
Indianapolis IN          $ 141,486    $ 752        16
Honolulu HI               $ 583,858    $ 3,080     16
Columbus OH           $ 143,267    $ 739        16
Los Angeles CA        $ 491,055    $ 2,460     17
Boston MA               $ 536,956    $ 2,623     17
Milwaukee WI          $ 271,040    $ 1,322     17
Atlanta GA                $ 244,610    $ 1,193    17
Nashville TN             $ 221,377    $ 1,078    17
Tulsa OK                  $ 144,454    $ 700       17
Philadelphia PA         $ 323,912    $ 1,523    18
Denver CO               $ 283,432    $ 1,315    18
Louisville KY            $ 157,667    $ 720       18
Memphis TN            $ 164,226    $ 747       18
Dallas TX                 $ 293,767    $ 1,324    18
Cleveland OH          $ 246,895    $ 1,046     20
San Diego CA          $ 396,409    $ 1,670    20
Kansas City MO      $ 240,076    $ 992       20
Oklahoma City OK  $ 195,663    $ 763       21
San Francisco CA    $ 774,728    $ 2,996    22
Portland OR             $ 307,858    $ 1,145    22
Seattle WA              $ 461,330    $ 1,546    25
Omaha NE              $ 275,844    $ 870       26
Fort Worth* TX      $ 328,076    $ 907       30
New York NY        $ 1,383,612 $ 3,538    33

Trulia.com’s Rent vs. Buy Index - Interpretation Key

Price-to-Rent Ratio of 1-15: It is much less expensive to own than to rent a home in this city Price-to-Rent Ratio of 16-20: It is more expensive to own a home in this city are The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation. Price-to-Rent Ratio of 21+: The total costs of owning a home in this city are much greater than the costs of renting.

Definitions: Total costs of home ownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase and ongoing HOA dues and private mortgage insurance, where applicable. Total costs of homeownership include an offset for the tax advantages of homeownership, including mortgage interest, property tax and closing cost deductions.

Total costs of renting include rent and renter’s insurance.

(Information source: Trulia.com)