Rent or buy?
Nationally, growth in home prices has outpaced increases in rent by nearly 70% from 2016 to 2023, with the median home price rising to $371,000 from $217,000 over that period. Three California metros with very expensive homes – San Jose, San Francisco and Los Angeles – had the largest average gap between renting and buying in 2023.In San Jose, the median rent is $3,181 while the monthly mortgage payment with a 6.8% interest rate is $9,372, a difference of $6,191. In Los Angeles, the difference is $2,802 and in San Francisco, it is $4,089.
However,from January 2022 to January 2023, rent growth was faster than housing price growth in half of the cities, according to the study. Those cities include San Francisco and New Orleans.Florida is home to the four cities – Miami, Jacksonville, Orlando, and Tampa – with the highest increases in home prices.Ten cities in the study have price-to-rent ratios of 21 or above, meaning it’s better to rent. San Jose has the highest price-to-rent ratio in the study at 38.