Is it better to rent or buy? Ken Johnson of Florida International University and Eli Beracha of East Carolina University recently crunched the numbers in 23 cities.
Nationwide, they found prices have dropped enough, and rents have risen enough, to make buying the better deal. But results vary.
In Dallas, for example, you’re likely still better off renting, despite reasonable home values of less than $140,000.
For one thing, rents are cheap too; nice, one-bedrooms go for as little as $500 a month. Prices are only about 18 times the annual rent of comparable homes.The big factor, however, is home price appreciation, which has been very slow historically here. There’s a lot of land available for development and few regulatory barriers to discourage builders. That has kept home values from rising quickly. So even today’s buyers can’t expect their home equity to rise very much.
NEXT: Seattle — BUY