Eight Markets Where Renting Is Better Than Buying

Home ownership has long been considered a route to building personal wealth. Unfortunately, in some housing markets, prices have gotten so high that this bit of wisdom no longer holds. There are certain markets where consumers are clearly better off renting a property and reinvesting the money they would have spent on ownership, according to an analysis by professors at Florida Atlantic University and Florida International University. "There is strong evidence that home prices in these markets are significantly higher than their respective long-term pricing trends," says Ken H. Johnson, a real estate economist and associate dean in FAU's College of Business. We cover those eight markets Johnson and his colleagues list in our slideshow above. As a side note, the researchers also uncovered a handful of markets where the decision to buy versus rent is a toss up: In Atlanta, Boston, Chicago, Cincinnati, Cleveland, Detroit, Honolulu, Los Angeles, Milwaukee, Minneapolis, New York, Philadelphia, San Diego, San Francisco and St. Louis, consumers are just as likely to create more wealth by renting and reinvesting as owning and building equity.