Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

10 Best Price to Rent Ratios By City In 2022

Written by JD Esajian

When you go from renting to buying a home for the first time, the process can be confusing. It can also be an amazing opportunity though as owning a home is something millions of Americans dream about.

However, both rent and the prices of buying homes are rising. Price-to-rent ratios are essential when home and rent prices are soaring as you want to make sure you are in an area with lower price-to-rent ratios if you plan to buy a home.

If you’re in an area where the price-to-rent ratios are high, you might want to consider renting until you move or until the ratio falls enough for you to comfortably buy a home without breaking the bank.

A price-to-rent ratio of 1 to 15 often means that buying is more favorable while a ratio of 16 to 20 means renting is more favorable. Anything above 21 also means that renting is a better option.

Depending on the state and city you live in, you might find one is more favorable than the other. This guide will show you the best price to rent ratios by city around the United States to examine renting and buying conditions.

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best price to rent ratio by city in 2022

What Is A Good Price To Rent Ratio?

A price-to-rent ratio is calculated by dividing the median home price by the median annual rent. You will need to use it when you are looking at investment properties as well as when you are deciding whether to buy or rent.

A good price-to-rent ratio is considered to be 15 or lower. It means that property prices are lower compared to rental rates so you will find it cheaper, in the long run, to buy instead of rent. A price-to-rent ratio of 16 to 20 is considered to be medium. So, property prices are about the same as rental properties.

If you are investing, you will be able to buy properties with the price-to-rent ratio but it doesn’t mean that it’s a better option than renting. A price-to-rent ratio of 21 or higher means that renting is much more favorable than buying so it makes much more financial sense to rent a home than buy one.

It also means there is a higher demand for rental properties, so if you already own homes as an investor, it’s a good time to rent them rather than sell them.

Price To Rent Ratio Trends 2021 – 2022

Here are some facts and statistics to keep in mind when looking at price-to-rent ratios in 2021:

  • Right now, buying in California is much more expensive than renting. In fact, seven of the 10 cities with the highest price-to-rent ratios are in California. Homes reached $916,071 for selling prices while the average year of rental prices was only $27,233.

  • Price-to-rent ratios tend to be the lowest in Midwest cities. Five of the 10 cities with the lowest price-to-rent ratios were in the Midwest including cities like Cleveland, Milwaukee, Chicago, Detroit, and Indianapolis. Detroit is the most favorable for home buyers since the price-to-rent ratio is 5.82.

  • San Francisco has the highest average rent while the cheapest rent is in Tulsa, Oklahoma. Renter in Tulsa only spends about $822 in rent each month.

Pros & Cons Of High Price To Rent Ratio Cities

Before investing in a property or before deciding whether to rent or buy it’s important to know the pros and cons of renting with a high price-to-rent ratio.


  • There are more job opportunities and fast-growing populations in the cities where there are high demands for rental properties.

  • High price-to-rent ratio means that property prices are high compared to rentals so more people willing to rent the homes you have since buying is too expensive.

  • There are more demands for long-term rentals and the rental incomes in these locations have an above-average return on investment.


  • Median home prices will be high and they will be more unaffordable especially if you are a beginner investor in real estate.

  • You will need intense planning to make sure you are getting a quick return on investment.

5 Highest Price To Rent Ratio Cities

1. San Jose, CA

San Jose has the highest price rent ratio of the 50 largest cities in the USA. A home costs about 42.16 times more than a year’s worth of rent with the average home price being about $1,261,667.

2. Long Beach, CA

Long Beach has the third highest price-to-rent ratio at 33.23. Homes sell for about an average of $757,500 while a year’s worth of rent is about $22,798.

3. Seattle, WA

The price-to-rent ratio in Seattle is 33.13. Homes sell for an average of $780,917 while the average annual rent is only $23,569.

4. Oakland, CA

Oakland has a price-to-rent ratio of about 31.98 with an average annual rent being about $27,683 and the average price of a house being about $885,167.

5. San Francisco, CA

Homes are the most expensive in the nation at about $1,461,917 and the average annual rent is $39,152. This gives a price-to-rent ratio of 37.34.

Pros & Cons Of Low Price To Rent Ratio Cities


  • Home prices are lower, so rental properties are more affordable and beginner real estate investors will find it easy to gain properties.

  • Rental prices are high, and home values are low, meaning there is a high return on investment and a larger potential for profits.


  • Home values are cheap and more people prefer to buy than rent so you might find a harder time finding renters.

  • Demand for housing is high so it can be hard to find good properties to invest in.

5 Lowest Price To Rent Ratio Cities

1. Baltimore, MD

The price rent to ratio here is only 12. The median home value is only $179,100, and the annual rent is only $13,080.

2. Milwaukee, WI

The price-to-rent ratio here is only 13.79. The average home is sold for about $175,667 while the average annual rent is only $12,743.

3. Cleveland, OH

Cleveland has a price-to-rent ratio of 7.57 with the average annual rent being $15,682 and the average home selling price being about $118,750.

4. Detroit, MI

Detroit has the most affordable homes in the nation with only a price-to-rent ratio of 5.82. The home sells for $75,667, and the average rent is about $1,084 per month.

5. Philadelphia, PA

The price-to-rent ratio here is about 14.03 with average homes costing $261,083, and the average annual rent is about $18,611.

Should You Buy Or Rent? 3 Tips To Consider

When deciding whether to rent or buy, you might want to first discuss everything with a professional. Working with a financial advisor can help you better understand your finances and where you can afford to invest.

You should also decide whether the monthly payment of the house is going to be more than 28% of your pre-tax salary. If this is the case, you need to consider renting or finding a home with a lower price point.

You can also use online digital tools to help you figure out whether you can afford to rent or buy properties.


Price-to-rent ratios are a huge factor to consider when you want to be a homeowner or if you want to begin investing in real estate. They can help you determine if your city is better for buying properties or finding tenants and renting. Examining the best price to rent ratios by city will make it much easier to determine where you would like to buy property if you are looking out of state.

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