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Market may tip toward buying in 2011

January 11, 2011 - Though a shaky housing market in 2010 encouraged many consumers to seek an apartment, analysts say low home prices may push more into moving into a new home this year.

Experts told Fortune that demand for apartments elevated rental prices in 2010, while high supply and rampant foreclosures continued to depress home prices. The upshot may mean that buying a home in certain cities has now become more affordable than renting.

"By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country," Mark Zandi of Moody's Analytics told the source.

Data from Moody's Analytics compared the rental and home prices in more than 50 metropolitan areas around the country and represented it with a ratio. According to that data, home prices in cities such as Atlanta, Detroit and Cleveland make buying a home there more affordable than renting. Comparatively, buyers moving to New York, Seattle or Nashville would likely be better off renting an apartment rather than buying a home.

The rent versus own debate has given many relocating families pause over the past year. A similar report from Trulia.com earlier this year showed that renting an apartment in New York or Seattle was a smarter move, while prices in Arlington, Texas; Fresno, California, and Miami favored homebuyers.
 

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