A new survey from online life insurance agency Haven Life asks where it is better to rent or buy in the U.S., finding that California is better for renting, and the South and Midwest are best for buying.
Cleveland had the best price-to-rent ratio in the survey with a median home price of $70,000 and comparable rental price at $825 per month. Bay Area city Sunnyvale, Calif. was found to be the "most unaligned" area for buyers, where a two-bedroom apartment typically costs $3,741 a month, and the median home listing price is $1.4 million, CBS News reports. California is home to the fifth-largest economy in the world, greater than the U.K., and to a quarter of the country's homeless population.
Haven Life used Trulia's price-to-rent ratio of 15, in which under 15 indicates it's better to buy, and over 15 shows it's smarter to rent; the insurer compared 200 of the most populous U.S. cities, using the most up-to-date data from Zillow. But this logic has a few wrinkles. The first one is that Zillow prices aren't always accurate. Its valuation models are sometimes thrown out by county and local property tax assessors ... Zillow's predicted values can also be "wildly inaccurate and inconsistent," said Vice President David Howell of McEnearney Associates, a Northern Virginia real estate firm, and at the very least can be off by 5 percent.