Wondering whether you should buy or rent? Well, according to a Forbes.com study released on Oct. 26, the decision depends on where you live.
In some cities, the cost of renting is significantly less than owning, so renters can afford to live in homes they couldn’t possibly purchase. Renters also benefit in areas where housing prices are still dropping.
It’s better to own, however, in places where the cost of renting is higher than the after-tax cost of owning.
Forbes.com compared buy-vs.-rent data from two well-known housing-data firms, Trulia.com and Zillow.com, with its own buy-vs.-rent data for high-end neighborhoods in 10 of the largest cities in the United States. It then came up with the six cities that are best for renters and six that are best for homeowners.
San Francisco was deemed the best city in which to rent, followed by New York. The cost of purchasing a home in San Francisco is 20 to 30 times annual rent, so renting makes more sense for many people. In New York, the cost is 17 to 35 times. Other cities in which it makes sense to rent are Los Angeles, San Diego, Boston and Washington, D.C.
The best city in which to buy a home, according to Forbes.com, is Miami, where the price-to-rent ratio is 8 to 17 times annual rent. Other cities in which it makes sense to buy are Jacksonville, Phoenix, Atlanta, Nashville and Houston.
