If you're looking for a quick and easy calculation about whether you should finally buy your dream home, you'll likely want to first check out your area's price-to-rent ratio.
(For a list of 10 U.S. cities where it's better to rent than buy click here.)
Trulia, the online real estate data provider, recently took a look at this hand statistic in the 50 largest U.S. cities by population. By comparing the average purchase price of a 2-bedroom home --including mortgage fees and maintenance expenses -- with the average rental price for 2-bedroom apartments, condos, and townhouses, Trulia calculated the price-to-rent ratio to determine whether it is better to rent or buy in a particular city.
Cities with low price-to-rent ratios (under 15) indicate that is cheaper to own a home than rent.
"At the peak of the real estate bubble, cities like Miami, Phoenix and Las Vegas were not affordable for many. Now the opposite is true," said Pete Flint, co-founder and CEO of Trulia. "Home sellers in these hard hit areas are forced to lower their prices to compete with all the foreclosures on the market. As a result, these unattainable markets are so affordable it makes better financial sense to buy than rent."
Check out Trulia's list of cities where it's cheaper to buy a home than rent.