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SmartAsset: Price-to-Rent Ratio in U.S. Cities

The price-to-rent ratio measures the relative affordability of renting and buying in a given housing market. It’s a good factor to consider if you’re deciding whether to rent or buy. It’s especially useful if you’re considering a move, because it allows you to see what prices look like in your new city. As a general rule, a lower price-to-rent ratio indicates that a place is more favorable to homebuyers. A higher ratio indicates a better environment for renters.

A financial advisor can help you put a financial plan together for your home buying needs and goals.

How to Calculate Price-to-Rent Ratio

To calculate the price-to-rent ratio, we used the following equation:

Median Home Value ÷ Median Annual Rent = Price-to-Rent Ratio

Our data comes from the U.S. Census Bureau, which provides median home values and median monthly rent. As a simple example of the how the formula works, consider Phoenix, Arizona. Phoenix has a median home value of $266,600 and a median annual rent of $13,284. So its price-to-rent ratio is 20.07, which you get by dividing $13,284 into $266,600.

Price-to-Rent Ratio by City

To help you in your renting and buying decisions, we found the price-to-rent ratio in the 50 largest U.S. cities. Median home value data comes from the Census Bureau’s 2019 1-year Community Survey. Note that these home values are just projections. Actual home values will vary based on other factors such as proximity to commercial centers, access to transit and home size. Rentals tend to be smaller (and therefore less expensive) than for-sale properties, so these values may overestimate true market prices.

The cities with the highest price-to-rent ratios are San Francisco, Oakland and New York. That means they’re the least friendly to homebuyers (since home values are significantly higher than what you’d pay in rent). At the other end of the spectrum are cities like Detroit, Memphis and Milwaukee. These markets are very favorable to homebuyers, with ratios below 13.

Price-to-Rent Ratios by City
City Price-to-Rent
Ratio
Median Home Value
San Francisco, California 51.79 $1,217,500
Oakland, California 42.06 $807,600
New York, New York 38.26 $680,800
San Jose, California 37.48 $999,900
Los Angeles, California 37.39 $697,200
Seattle, Washington 36.65 $767,000
Long Beach, California 35.07 $614,400
Washington, D.C. 33.61 $646,500
San Diego, California 30.38 $658,400
Boston, Massachusetts 30.12 $627,000
Portland, Oregon 28.28 $445,200
Denver, Colorado 26.02 $447,500
Atlanta, Georgia 23.83 $359,500
Austin, Texas 23.63 $378,300
Sacramento, California 23.15 $380,600
Miami, Florida 23.02 $358,500
Las Vegas, Nevada 22.34 $305,900
Minneapolis, Minnesota 22.02 $282,200
Colorado Springs, Colorado 21.88 $318,200
Fresno, California 21.79 $276,600
Chicago, Illinois 20.22 $272,200
Nashville, Tennessee 20.10 $287,300
Phoenix, Arizona 20.07 $266,600
New Orleans, Louisiana 20.04 $242,900
Raleigh, North Carolina 19.65 $274,200
Albuquerque, New Mexico 19.50 $211,800
Mesa, Arizona 19.16 $259,300
Tampa, Florida 18.42 $265,700
Virginia Beach, Virginia 18.11 $296,200
Charlotte, North Carolina 17.89 $252,100
Dallas, Texas 17.10 $231,400
Tucson, Arizona 17.01 $172,700
Louisville, Kentucky 16.33 $172,100
Arlington, Texas 15.85 $213,800
Oklahoma City, Oklahoma 15.80 $165,700
Fort Worth, TX 15.72 $209,400
Omaha, Nebraska 15.59 $175,800
Tulsa, Oklahoma 15.39 $152,700
Jacksonville, FL 15.18 $200,200
Houston, Texas 14.90 $195,800
Columbus, Ohio 14.68 $173,300
Kansas City, Missouri 14.33 $168,400
Indianapolis, Indiana 14.26 $155,400
Philadelphia, Pennsylvania 14.15 $183,200
San Antonio, Texas 13.86 $171,100
Baltimore, Maryland 13.69 $179,100
El Paso, Texas 13.14 $133,600
Milwaukee, Wisconsin 12.87 $133,600
Memphis, Tennessee 10.46 $115,900
Detroit, Michigan 5.67 $58,900

Price-to-Rent Ratio in New York City

SmartAsset: Price-to-Rent Ratio in U.S. Cities

While the median home value in New York City is $680,800, real estate value differs in all five boroughs. In Manhattan and Brooklyn, the numbers are higher. The following table has price-to-rent ratios for each of the five New York boroughs. Applying that ratio, We also calculated a projected average home price for a house or apartment that rents for $1,000 in each market. Considering its high ratio, Manhattan is one of the most expensive places to buy a home in the country.

Price-to-Rent Ratios in New York City
Borough Price-to-Rent
Ratio
Home Price
(for a $1,000 Rental)
Manhattan 50.81 $609,681
Brooklyn 42.78 $513,387
Queens 30.32 $363,867
The Bronx 28.49 $341,845
Staten Island 32.48 $389,813

Historical Price-to-Rent Ratio

National and city price-to-rent ratios rise and fall over time depending on the state of the housing market. In the years before the housing crisis, as the housing market heated up, the national ratio rose from 22.73 (in 2005) to 24.50 (in 2007). After the real estate market turned, home prices fell and rentals grew more expensive. That drove down the ratio and it dipped below 20 in 2011. In 2021, it sits at 18.27.

Before the housing bubble and subsequent crisis around 2008, the national price-to-rent ratio hovered around 15. That indicates that we are still in a time period that is slightly more favorable to renters than buyers.

Bottom Line: What Price-to-Rent Ratio Says About Affordability

While the price-to-rent ratio is useful for comparing buying to renting, it does not reflect the overall affordability of buying or renting in a given market. In theory, a place where renting and buying are very expensive could have the same price-to-rent ratio as a place where both renting and buying are very cheap.

Take San Francisco as an example. The city has the highest price-to-rent ratio in the country, indicating that renting should be more affordable than buying. However, rentals in San Francisco are also notoriously expensive. The city’s high price-to-rent ratio only reflects that buying is relatively more expensive than renting within the city. It does not saying anything about the overall affordability of housing compared to other cities.

Home Buying Tips for Beginners

  • If you’re like most people, a home is the most expensive purchase you’ll ever make. That’s why it’s a good idea to consult with a financial advisor before taking the plunge into homeownership. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Trying to decide whether to buy a home or continue renting? Our rent vs. buy calculator can help make the decision easier.

Photo credit: ©iStock.com/Vasyl Dolmatov, ©iStock.com/Eloi_Omella

Nick Wallace Nick Wallace studied Economics at the University of Washington. He enjoys getting people thinking about finances by looking at the numbers. Nick is a freelance journalist and data analyst living in Michigan. He still lends his economic and analytic expertise for SmartAsset's studies.
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