Is it better to rent or buy a home?
I'm often asked by people if it is better to rent or buy a home. And, I often tell people that the answer isn't that simple.
In most cases, it is less expensive in the long-term to buy, but this calculator can help with your decision from a financial perspective.
Another way to compare rent v. buy costs is to look at the price-to-rent ratio. This measures the relative affordability of renting and buying in a market. It is calculated as the ratio of home prices to annual rental rates. For example, in a market where the average home worth $200,000 rents for $1000 a month, the price-rent ratio is 16.67 using the formula: $200,000 ÷ (12 x $1,000).
In 2016 Pittsburgh had a price-to-rent ratio of 12, indicating it is an affordable market for buying a home when compared to rental rates.