Playing the “rent vs. own” game is a popular pastime as the U.S. continues to be gripped by tough economic conditions.
But finally we have hard data on whether it’s really cheaper to rent than to own. A new study from Trulia.com makes an interesting case in each direction — especially if you live in certain metropolitan areas.
Here’s the deal. According to the Trulia’s new Rent vs. Buy Index, it really is cheaper to rent than to own in or near certain U.S. cities.
But home ownership is better in other urban areas.
We’ll get to the specific cities on both ends of the scale in a moment, but how is Trulia figuring this all out? The answer lies in a price-to-rent calculation that relies on the average list price compared with the average rent on a two-bedroom condo, townhouse, or apartment. Trulia used the formula on 50 of the biggest U.S. cities, based on population.
In calculating the differences, Trulia also used home prices included mortgage principal and interest, property taxes, hazard insurance, closing costs and homeowner association dues. Ancillary data, like tax advantages of homeownership and closing cost deductions, were also factored into the equation.
Here’s a list of what Trulia found:
Best Cities to Buy
City Price-to-Rent Ratio
- Minneapolis 8
- Arlington, Texas 8
- Miami, Fla. 8
- Fresno, Calif. 8
- San Antonio 8
- Mesa, Ariz. 9
- Jacksonville, Fla. 9
- Phoenix 10
- El Paso, Texas 10
- Las Vegas 11