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Homeownership trumps renting in most cities

January 25, 2011 - Moving into a new home is more affordable than renting across most U.S. cities, according to a new report.

The website Trulia reported that buying a home was more affordable than renting apartment in 72 percent of the 50 American cities it surveyed in its latest Rent vs. Buy index. The site developed a price-rent ratio by comparing home and rental prices in each city. Markets with ratios of 15 or lower were ones where buying was more favorable, while those between 16 and 20 were ones where renting was more affordable, but where buying might still be a smart idea depending on certain situations. Cities with ratios over 21 were ones where renting was far more affordable than buying.

Those moving to New York City, Seattle, San Francisco and Kansas City are better off shopping for an apartment, said the report, as the benefits of renting far outweigh buying in those cities. But in nearly all other U.S. metros, families may want to at least consider their own personal finances and decide if buying a home works for them, said the report.

The decision to buy a home could depend on their employment situation. The latest report from the Department of Labor showed that many Americans may be on the job search this week, as initial claims for unemployment insurance reached 404,000 during the week ending January 15. That figure was actually down by 37,000 from the week before.
 

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