USA Today conducted a new study to determine where in the U.S. it makes sense to rent vs. buy and vice versa. The study looked at 33 major metropolitan areas and calculated a “rent gap” – the difference between the cost of owning and renting – for each market.
The market where it made the most sense to rent vs. buy was in San Francisco, CA, where a buyer would pay 43% more of their income towards a mortgage than they would have if they just paid rent. On the flip side, buyers in Miami-Fort Lauderdale, FL would save nearly 11% of their income if they purchased a home instead of rented one.
Markets Favoring Renters Over Buyers
- San Francisco, Calif.: 42.5%
- San Jose, Calif.: 19.1%
- Seattle, Wash.: 8.6%
- San Diego, Calif.: 7.0%
- Sacramento, Calif.: 6.5%
- Los Angeles, Calif.: 5.0%
- Portland, Ore.: 5.0%
- Riverside-San Bernardino, Calif.: 4.2%
- Las Vegas, Nev.: 2.5%
- Phoenix, Ariz.: 1.8%
- Baltimore, Md.: 1.7%
- Denver, Colo.: 1.5%
- Washington, D.C.: 1.5%
- St. Louis, Mo: 0.5%
- Dallas-Fort Worth, Texas: 0.3%
- Charlotte, N.C.: 0.1%
Markets Favoring Buyers Over Renters
- Miami-Fort Lauderdale, Fla.: -10.9%
- Detroit, Mich.: -7.1%
- Chicago, Ill.: -5.6%
- Philadelphia, Pa.: -5.0%
- Tampa-St. Petersburg, Fla.: -4.6%
- Pittsburgh, Pa.: -4.5%
- Cleveland, Ohio: -3.5%
- Cincinnati, Ohio: -3.4%
- Orlando, Fla.: -3.2%
- Houston, Texas: -2.5%
- San Antonio, Texas: -2.3%
- New York City, N.Y.: -1.8%
- Minneapolis-St. Paul, Minn.: -1.5%
- Kansas City, Mo.: -1.4%
- Columbus, Ohio: -1.1%
- Boston, Mass.: -0.6%
- Atlanta, Ga.: -0.1%