Where Does It Make Sense To Buy A Home?

The answer is basically everywhere. Jed Kolko reports on the findings of a new study examining the ratio of home prices to annualized rent in 100 of the largest metropolitan areas in the United State.

"It is now cheaper to buy a home than to rent in 98 of the 100 largest U.S. metropolitan areas," according to Trulia's newly released Winter 2012 Rent vs Buy Index, which "tracks whether it is more affordable to rent or to buy a home by looking at asking prices on Trulia.com for rentals and for-sale homes with similar attributes in similar neighborhoods."

The index shows that lowest price-to-rent ratios can be found in Detroit, Oklahoma City, and Dayton, Ohio. Of the 100 metropolitan areas, only Honolulu and San Francisco were found to have ratios outside the "buying is cheaper" range.

"What factors contribute to higher price-to-rent ratios in some metros?" writes Kolko. "Surprise! It's not the effect of the housing bubble. Metros where prices fell more during the bust don't have either lower or higher price-to-rent ratios, on average, than other metros that weathered the bust better...Long-term fundamentals, not short-term changes in prices, determine which metros have high price-to-rent ratios."

Full Story: Where to Buy and Where to Rent Now

Comments

Book cover of the Guide to Graduate Planning Programs 4th Edition

Thinking about Grad School?

New! 4th Edition of the Planetizen Guide to Graduate Urban Planning Programs just released.
Starting at $24.95

Prepare for the AICP Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $209

Stay thirsty, urbanists

These sturdy water bottles are eco-friendly and perfect for urbanists on the go.
$19.00
Wood necklace with city map

City Necklaces

These sweet pendants are engraved on a cedar charm with a mini map of selected cities. The perfect gift for friends and family or yourself!
$28.00