Interestingly, two articles came across my desk today discussing the rental market for 2011. One from CNNMoney.com’s Fortune cites recent Moody’s Analytics data projecting that the “rent vs. own ratio” is going to shift to the “better to own” side in 2011. Current data shows that in 39 of 54 U.S. metropolitan areas tracked the rent vs. own ratio indicates it’s “better to rent” at the moment. But Moody’s chief economist, Mark Zandi, expects this to reverse and says by the end of 2011 buying will be superior to renting in most parts of the country.
Reno is not one of the 54 metropolitan areas tracked, however Las Vegas is. Looking at the table presented in the article, I see that the rent vs. own ratio for Las Vegas already indicates it’s “better to own” there. See Rent vs. own ratio to flip in 2011? for all the data.
The second article seems to support Moody’s data. According to a rental market report released today by HotPads.com, rental prices across the US increased 11.6 percent in 2010, while home prices decreased 9.8 percent. See HotPads 2010 Rental Housing Report.
Both reports cite the growing number of homeowners losing their homes to foreclosure as creating a surplus of renters and increasing rents.
Guy Johnson
Looking at the table of price-rent ratios in the Fortune article I see the metropolitan area exhibiting the strongest indication to buy over renting is Cleveland, Ohio.
Jeffrey Dow Jones
Glad you mentioned this; it’s sort of a forgotten concept in today’s market which is dominated by the depressed, deflationary mindset.
I did a historical chart of the median rent payment vs the median mortgage payment. The more granular regional data that you linked to is better, but the chart adds some historical color.
Thanks for posting this rent vs. buy stuff!