J.D. Roth over at Get Rich Slowly put up a post Wednesday about renting vs. buying, sort of a follow-up to my 2007 post over there. In it, he said that he couldn’t find any info on current price-to-rent ratios around the country, so I thought I would update the list I put up back in September with some more up-to-date information.
This time I was able to locate sold price info for Texas and Indiana, so the list below is the complete set of price, rent, and income data for the 25 largest cities in the US by population. Data is current as of November 2009. For a historical comparison, hit this 2007 Fortune table (the “The P/R Ratios” tab has 15-year averages).
Also, if you’re just interested in how things look around the Seattle area, hit this October post that breaks down seven neighborhoods in the area (note that the method used in that post is different than the one used to compile the table below).
Note that the “P/R” column is the median price divided by the median rent over the course of a full year, which is the “Rent” column times twelve.
Click on any column header to sort by that column.
| City | State | Pop. | Density | Price | Rent | Income | P/R | P/I | I/R |
|---|---|---|---|---|---|---|---|---|---|
| New York | NY | 8,363,710 | 27,440 | $477,900 | $1,013 | $50,094 | 39.3 | 9.5 | 4.1 |
| Los Angeles | CA | 3,833,995 | 8,205 | $407,900 | $1,024 | $47,904 | 33.2 | 8.5 | 3.9 |
| Chicago | IL | 2,853,114 | 12,649 | $234,100 | $837 | $45,973 | 23.3 | 5.1 | 4.6 |
| Houston | TX | 2,242,193 | 3,828 | $75,000 | $752 | $43,429 | 8.3 | 1.7 | 4.8 |
| Phoenix | AZ | 1,567,924 | 2,938 | $141,300 | $850 | $49,137 | 13.9 | 2.9 | 4.8 |
| Philadelphia | PA | 1,447,395 | 10,721 | $144,800 | $772 | $36,236 | 15.6 | 4.0 | 3.9 |
| San Antonio | TX | 1,351,305 | 2,809 | $81,098 | $713 | $41,416 | 9.5 | 2.0 | 4.8 |
| Dallas | TX | 1,279,910 | 1,427 | $80,000 | $746 | $39,980 | 8.9 | 2.0 | 4.5 |
| San Diego | CA | 1,279,329 | 1,612 | $380,000 | $1,208 | $61,415 | 26.2 | 6.2 | 4.2 |
| San Jose | CA | 948,279 | 2,223 | $468,400 | $1,277 | $79,004 | 30.6 | 5.9 | 5.2 |
| Detroit | MI | 912,062 | 6,378 | $25,300 | $709 | $28,155 | 3.0 | 0.9 | 3.3 |
| San Francisco | CA | 808,976 | 17,323 | $716,700 | $1,224 | $72,322 | 48.8 | 9.9 | 4.9 |
| Jacksonville | FL | 807,815 | 1,062 | $140,800 | $826 | $49,466 | 14.2 | 2.8 | 5.0 |
| Indianapolis | IN | 798,382 | 2,152 | $76,948 | $678 | $42,779 | 9.5 | 1.8 | 5.3 |
| Austin | TX | 757,688 | 2,396 | $121,263 | $865 | $50,345 | 11.7 | 2.4 | 4.8 |
| Columbus | OH | 754,885 | 3,556 | $128,200 | $713 | $43,482 | 15.0 | 2.9 | 5.1 |
| Fort Worth | TX | 703,073 | 1,828 | $80,000 | $756 | $47,893 | 8.8 | 1.7 | 5.3 |
| Charlotte | NC | 687,456 | 2,516 | $161,800 | $777 | $51,479 | 17.4 | 3.1 | 5.5 |
| Memphis | TN | 669,651 | 2,327 | $115,100 | $733 | $36,463 | 13.1 | 3.2 | 4.1 |
| Baltimore | MD | 636,919 | 7,889 | $159,100 | $797 | $39,507 | 16.6 | 4.0 | 4.1 |
| El Paso | TX | 613,190 | 2,447 | $96,000 | $584 | $36,848 | 13.7 | 2.6 | 5.3 |
| Boston | MA | 609,023 | 12,561 | $327,300 | $1,096 | $50,654 | 24.9 | 6.5 | 3.9 |
| Milwaukee | WI | 604,477 | 6,296 | $128,600 | $709 | $36,584 | 15.1 | 3.5 | 4.3 |
| Denver | CO | 598,707 | 3,905 | $216,800 | $753 | $44,914 | 24.0 | 4.8 | 5.0 |
| Seattle | WA | 598,541 | 7,179 | $377,300 | $912 | $60,550 | 34.5 | 6.2 | 5.0 |
Also, I pointed this out in our mid-week open thread, but thought it was worth mentioning here as well. I find it fascinating what a telling indicator it is of just how much the general mindset about home ownership has changed when you compare the comments on my 2007 post over at Get Rich Slowly and J.D.’s follow-up from Wednesday.
A selection of comments from each post…
2007:
- This is one of the worst pieces of financial advice I have ever seen. Yes, if you want to get poor slowly, by all means rent instead of buy.
- House values also increase over time. A renter gets no benefit from this.
- I hate it when PF Blogs let someone post about how renting isn’t such a bad deal. Renting sucks. How much do the renters benefit when property values rise? They don’t.
- All else being equal, when you rent you’re paying the mortgage, utilities, repairs, etc… AND the landlord is making a profit.
- Debt is not always bad – it can work as a multiplier for your financial leverage, and at least when buying a house, you’ll probably get a return.
2010:
- A lot of the time I wish we were still renting.
- I’ve done both, and am currently stuck with a house I am renting because it won’t sell. I probably won’t buy again.
- I appreciate this. I rent, I plan to keep renting for a long time, and I get very tired of friends and coworkers giving the whole “throwing your money away” crap.
- I came pretty close to buying a few times before I figured this out, and I’m really glad that I didn’t. I don’t envy any of my friends who are upside down on their mortgages and stuck wherever they are, but even ignoring the bubble/burst effect, ownership isn’t always that great of a deal over the long haul.
- I really appreciate how much money I save by renting in just time usage alone.
- This is a great article. Thank you for the insight. I’ve read several articles on this topic but this is the best one I’ve seen.
What a difference two and a half years makes.