Hat tip to SM for sending this along, from David Leonhardt at the nytimes.com:
Below is an updated list of rent ratios — the price of a typical home divided by the annual cost of renting that home — for 55 metropolitan areas across the country.
We last covered this subject about eight months ago, and you’ll notice that most ratios have not changed much since then. A good rule of thumb is that you should often buy when the ratio is below 15 and rent when the ratio is above 20. If it’s between 15 and 20, lean toward renting — unless you find a home you really like and expect to stay there for many years.
|East Bay, Calif.||35.9|
|San Jose, Calif.||32.7|
|Orange County, Calif.||27|
|New York (Manhattan)||26.7|
|North – Central New Jersey||25.2|
|Long Island, N.Y.||21.4|
|Washington – Northern Virginia – Maryland||18.3|
|Palm Beach County, Fla.||17.6|
|Salt Lake City||17.6|
|Fort Lauderdale, Fla.||15.7|
|Kansas City, Kan.||15.3|
|Inland Empire, Calif.||15.1|
|National average for metro areas||15.1|
|Dallas – Fort Worth||13.8|
It’s pretty amazing when you think about it. The country has suffered through a terrible crash in home prices, yet buying a house remains an iffy proposition in many markets.
The data comes from Mark Zandi of Moody’s Analytics and covers the second quarter of this year. Home prices haven’t changed very much since then, so I would expect ratios in most places to be quite close to the numbers you see here.