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Where Is It Cheaper To Rent Than To Buy? 16 U.S....

The high cost of home ownership is no secret in the West Coast cities, but the gap between monthly rent and monthly mortgage payments (includes principal, taxes, insurance and interest, or "PITI") in those northern California cities is shocking in some cases. A recent study by the Urban Institute looked at the "rent gap"—or the additional portion of income that would go to cover the cost of a mortgage relative to the median rent—and found that there were sixteen cities where it will cost less per month to rent a home than to own one. The cities at the top of the chart are where it is cheaper to own a home than to rent one. Click on the chart to expand. The chart below shows percentages of income. Looking at San Francisco, a buyer would have to spend 79.68% of the median income on monthly housing payments whereas a renter would spend only 35.66% of median income. Of course most people aren't spending nearly 80% of their income on housing (let's hope not), but the statistic is a useful way to compare rents versus mortgage payments just to see how big a jump it takes to become a homeowner in some of the largest cities in America. This chart shows the share of median income each city would require to buy a home. Renters, tell me if this feels consistent with what you're experiencing in your cities. Email me at amydobsonRE@gmail.com or tweet me @amydobsonRE