15 Cities With the Highest Rent-to-Price Ratio

Editor’s Note: This story originally appeared on Roofstock.

With both real estate and rental prices rising quickly over the last two years, U.S. households that don’t currently own a home are facing a major affordability crunch.

The residential real estate market took off shortly after the COVID-19 pandemic began. Boosted by increased savings, low interest rates, and government stimulus programs and motivated by a desire for more living space, buyers rushed into the market.

The increased competition sent home prices to record heights. But now, with interest rates rising in efforts to cool the market and higher prices being a new normal, many would-be buyers have been priced out.

This state of affairs has left more prospective buyers in the rental market, and as a result of increased demand, rents have spiked dramatically over the last year and a half.

For homeowners and landlords whose costs are locked in, the current market has been a boon. Homeowners have gained an estimated $6 trillion in equity during the pandemic. Landlords — especially larger corporate owners — are benefiting from greater profit margins as they raise rents to account for market conditions.

Homeowners face difficult choices in a market like this one — and based on recent trends, the squeeze for renters could continue.

A location’s rent-to-price ratio is one metric that potential buyers can use to assess whether it makes more sense to continue renting or try to purchase a home in their area.

In markets where the ratio of rents to the cost of homeownership is higher, purchasing a home makes more sense. In locations with lower rent-to-price ratios, where costs of homeownership exceed rents, real estate may be overvalued.

To find the locations with the highest rent-to-home-price ratios, Roofstock crunched numbers from the Department of Housing and Urban Development (HUD), Zillow, and the U.S. Census Bureau.

Here are the U.S. metropolitan areas with the highest rent-to-price ratios.

15. Hartford-West Hartford-East Hartford, CT

• Rent-to-price ratio: 5.04%
• Median rent approximation: $1,361
• Median home price: $323,880
• Monthly mortgage payment for a median-price home: $1,426

14. St. Louis, MO-IL

• Rent-to-price ratio: 5.08%
• Median rent approximation: $1,035
• Median home price: $244,294
• Monthly mortgage payment for a median-price home: $1,076

13. Buffalo-Cheektowaga-Niagara Falls, NY

• Rent-to-price ratio: 5.14%
• Median rent approximation: $1,069
• Median home price: $249,405
• Monthly mortgage payment for a median-price home: $1,098

12. Louisville-Jefferson County, KY-IN

• Rent-to-price ratio: 5.31%
• Median rent approximation: $1,069
• Median home price: $241,642
• Monthly mortgage payment for a median-price home: $1,064

11. Virginia Beach-Norfolk-Newport News, VA-NC

• Rent-to-price ratio: 5.31%
• Median rent approximation: $1,454
• Median home price: $328,320
• Monthly mortgage payment for a median-price home: $1,446

10. Cleveland-Elyria, OH

• Rent-to-price ratio: 5.35%
• Median rent approximation: $982
• Median home price: $220,420
• Monthly mortgage payment for a median-price home: $970

9. New Orleans-Metairie, LA

• Rent-to-price ratio: 5.35%
• Median rent approximation: $1,209
• Median home price: $271,110
• Monthly mortgage payment for a median-price home: $1,194

8. Birmingham-Hoover, AL

• Rent-to-price ratio: 5.37%
• Median rent approximation: $1,100
• Median home price: $245,833
• Monthly mortgage payment for a median-price home: $1,082

7. Houston-The Woodlands-Sugar Land, TX

• Rent-to-price ratio: 5.41%
• Median rent approximation: $1,410
• Median home price: $312,533
• Monthly mortgage payment for a median-price home: $1,376

6. Chicago-Naperville-Elgin, IL-IN-WI

• Rent-to-price ratio: 5.53%
• Median rent approximation: $1,447
• Median home price: $313,828
• Monthly mortgage payment for a median-price home: $1,382

5. Memphis, TN-MS-AR

• Rent-to-price ratio: 5.55%
• Median rent approximation: $1,077
• Median home price: $233,002
• Monthly mortgage payment for a median-price home: $1,026

4. Oklahoma City, OK

• Rent-to-price ratio: 5.80%
• Median rent approximation: $1,056
• Median home price: $218,494
• Monthly mortgage payment for a median-price home: $962

3. Detroit-Warren-Dearborn, MI

• Rent-to-price ratio: 5.89%
• Median rent approximation: $1,192
• Median home price: $243,049
• Monthly mortgage payment for a median-price home: $1,070

2. Rochester, NY

• Rent-to-price ratio: 5.96%
• Median rent approximation: $1,085
• Median home price: $218,475
• Monthly mortgage payment for a median-price home: $962

1. Pittsburgh, PA

• Rent-to-price ratio: 6.02%
• Median rent approximation: $1,063
• Median home price: $211,871
• Monthly mortgage payment for a median-price home: $933

Methodology

To find the metros with the highest rent-to-home-price ratios, Roofstock crunched numbers from the Department of Housing and Urban Development’s 50th Percentile Rent Estimates, the U.S. Census Bureau’s 2020 American Community Survey (ACS), and Zillow’s Zillow Home Value Index. The rent-to-price ratio was calculated as the ratio of annualized median rent to Zillow’s Home Value Index.

Median rent was calculated as the weighted average of rent for a studio, 1-bedroom, 2-bedroom, 3-bedroom, and 4-bedroom apartment. The number of renter households by bedroom from the ACS were used as weights. Median home price comes from Zillow’s most recent home value index.

The monthly mortgage payment for a median-price home assumed a 30-year fixed mortgage, 20% down payment, and a 5.22% interest rate. Additionally, metros were grouped into the following cohorts based on population size:

• Small metros: 100,000–349,999
• Midsize metros: 350,000–999,999
• Large metros: 1,000,000 or more